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
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