15th November 2017.
No Deal Could Lead to Inflation Rise: Bank Warns
Bank of England governor, Mark Carney has warned that if the UK fails to negotiate a transition deal with the European Union, the UK could suffer even higher inflation.
Carney warns an abrupt exit from negotiations could result in a further fall in the value of the pound, dent British investment, and squeeze the UK economy even further.
In a recent European Central Bank’s communication conference, Carney spoke about his support for a swift deal with the EU, adding he would “cast my vote” to get the wheels turning.
Carney further added he understood many businesses remain uncertain how Brexit will affect them. He pledged that the Bank will do “what it can” to keep the economy growing and the financial system stable.
His comments came just after it was announced that inflation has not risen as expected, but food prices and food inflation continue to climb.
The Bank of England has been the brunt of some controversy recently, with many economists questioning their recent decision to rise interest rates.
During the conference, Sir Jon Cunliffe, deputy governor at the Bank, stated he had voted against the interest rate increase, because he’d wanted to see pay rates rise before reining in inflation.
While unemployment continues to plummets, pay is not rising as expected. Cunliffe suggests due to higher business costs and economic turmoil, the traditional relationship between jobs and pay may have broken down.
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