Bank of England Deputy Governor Ben Broadbent said Britain’s economy has performed “somewhat more strongly” after June’s Brexit vote than the BoE had expected, but it was too soon to say what that meant, if anything, for the longer term.
“There’s little doubt that the economy has performed better than surveys suggested immediately after the referendum and, although we aimed off those significantly, somewhat more strongly than our near-term forecasts as well,” Broadbent said in a speech at the Wall Street Journal’s offices in London.
The reasons for the moderate impact of the referendum vote on the economy included momentum in domestic demand, the quick impact of the fall in the value of sterling on the economy and the gentle impact so far on the housing market, he said.
But Broadbent said he did not want to over-interpret the recent economic data and the BoE would outline its thinking when it publishes its next set of economic forecasts on Nov. 3.
“The wiser course is to wait for the November Inflation Report, which gives us a good opportunity to reflect more systematically on the news since August, and what it implies – if anything – for the medium-term outlook,” he said.
The BoE cut interest rates to a new record low of 0.25 percent in August and took other measures to help the economy weather the shock of the Brexit vote.
In September, it said most of its policymakers still expected to cut rates again before the end of the year, unless there was a meaningful change to their view on the outlook.
Since then, a string of data has added to signs that the impact of the Brexit vote was less severe than the BoE originally thought.