Bank of England would face big challenge if UK votes for Brexit - Osborne

Britain's Chancellor of the Exchequer George Osborne speaks at an event at the National Composites Centre at the Bristol and Bath Science Park, in Bristol, Britain, April 18, 2016. REUTERS/Matt Cardy/Pool

LONDON (Reuters) - British Chancellor George Osborne said the Bank of England would probably face a “difficult trade-off” between tackling rising inflation and slowing growth if the country votes to leave the European Union in a referendum next month.

“I just think it would be a very challenging time for monetary policy because you would have two things pulling in opposite directions,” Osborne told lawmakers in parliament on Wednesday.

He was responding to a question about the likelihood of an interest rate cut by the BoE in the event of an “Out” vote dealing a shock to Britain’s economy. At the same time, an expected fall in the value of sterling could push up inflation.

“They (the BoE) would face, this is generally accepted, a quite difficult trade-off between tackling rising inflation and weaker output. What their decision would be, would be for them,” Osborne said.

Reporting by David Milliken, writing by William Schomberg