Sunday 25 September 2016

Brexit already hitting house prices, pound could plunge - stark new warning from BofE

Published 16/06/2016 | 12:19

Bank of England governor Mark Carney. Photo: Bloomberg
Bank of England governor Mark Carney. Photo: Bloomberg

The Bank of England has warned it is "increasingly probable" that Brexit could send the pound plunging.

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It added that referendum uncertainty is already hitting the housing market as Britons put spending decisions on hold.

Policymakers sounded the alarm once more over the impact on the economy of a vote to leave the EU as they said uncertainty caused by the referendum was seeing delays in "major economic decisions" among households and in the corporate sector.

This is sparking a slowdown in the sale of houses and cars, while, in the corporate sector, commercial real estate transactions and deals are being put on ice, according to the Bank.

The Bank added that the result of the June 23 poll remained the "largest immediate risk" facing financial markets, not just in the UK, but worldwide.

All nine-members of the Monetary Policy Committee (MPC) voted to keep interest rates on hold at 0.5%, where they have been since March 2009.

In the minutes of the decision, the Bank reiterated warnings that a Brexit vote could lead to a "materially lower" growth outlook and ramp up inflation as the pound was likely to plunge in value.

 

 

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