Bank of England’s Vlieghe: no-deal Brexit could mean near zero interest rates – business live

Source: --- Friday, July 12, 2019
Policymaker Gertjan Vlieghe said rates might have to be cut to virtually zero if the UK crashes out of the EU without a deal Full story: no-deal Brexit could mean near 0% rates Thomas Cook in £750m rescue deal 12.56pm BST Bank of England policymaker Gertjan Vlieghe has won support today for suggesting the MPC should publish its own preferred interest rate, rather than focusing its forecasts on the market’s expectations for rates. Professor Costas Milas of Liverpool University’s Management School, has written in on the point: MPC Member Gertjan Vlieghe suggested that the Bank of England’s Inflation Report should publish its preferred path of interest rates. Currently, the Bank’s Inflation Report conditions its inflation and output growth forecasts on two alternative scenarios: (a) the current interest rate (which stays the same in the future) and (b) an interest rate moving up or down in line with the expectations of financial markets. Nevertheless, as my colleague Michael Ellington and I have recently argued , the Bank’s forecasting record under the assumption of constant interest rates is pretty weak. The same holds under the assumption of interest rates moving in line with market expectations. 12.27pm BST Deutsche Bank has scaled back its redundancy packages for laid off City workers, according to a report in Financial News . The German bank is offering less generous terms compared with previous rounds of redundancy, the repor ...

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