UK Could Need Interest Rate Cuts Even if Voters Shun Brexit, Admits Bank of England Official

The Bank of England has held its rates at 0.5pc since March 2009

by Szu Ping Chan, and Peter Spence

The Bank of England must stand ready to slash interest rates towards zero if the economy does not bounce back quickly from its current malaise, according to a top official.

Gertjan Vlieghe, an external member of the Monetary Policy Committee (MPC), signalled that he would vote for more stimulus even if the UK voted to remain in the EU next month and he did not see “convincing evidence” of a rapid improvement in the economy.

Speaking at the London Business School, Mr Vlieghe said the EU referendum posed “challenges” for setting interest rates as policymakers try to separate “short-lived” uncertainty, due to the referendum, from more persistent factors dragging on growth.

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