Brexit is a “unique example of deglobalisation which will hit the UK economy, leading to inflationary pressures and weighing on investment”. This is what Mark Carney, Governor of the Bank of England, intervened on Monday during the meeting of the Monetary Fund.
With exit talks stalled, the political consequences of Brexit are still hard to comprehend. The Bank of England will be called upon to make important decisions in the coming weeks, perhaps abandoning ultra-expansionary monetary policies. It therefore seems obvious that the Bank of England will soon raise interest rates, trying to halt the depreciation of the pound.
Carney stressed that while the intention of Brexit was not to leave the UK detached from the rest of the world, this is likely to be the scenario for the foreseeable future, as trade networks with Europe have deteriorated, and those with other countries are still in the development stage.
The Governor of the British central bank declared that "an increase in interest rates may be necessary over the next few months". In general, Carney explained that globally, ie even outside the UK, "the balance of interest rates is upwards."
Meanwhile, a Reuters survey of 123 companies that employ most of the City's workers has shown that around 10 jobs will be moved out of the UK or created across the Channel in the first few years of Brexit if Britain is denied access to the European single market.
