BoE Deputy Governor Dave Ramsden said in case of a smooth Brexit with transition, the MPC expected UK growth to pick up, leading to excess demand and building domestic inflationary pressure. In such case, further monetary tightening is appropriate. Ramsden’s GDP growth expectation was “a little more pessimistic”. However, he also saw “downside risks to productivity, while he’s also “less optimistic on investment recovery”. Thus, his overall view on monetary policy was broadly in line with the MPC.
Ramsden noted that the “biggest risk to the UK economy and UK financial stability, remains that of a Brexit outcome of no deal and no transition.” But he emphasized that “most risks to financial stability that could arise have been mitigated”, even though “a no deal, no transition Brexit could still be expected to bring significant market volatility, as well as economic instability.”
