Gertjan Vlieghe’s comments on a no-deal Brexit and interest rates go further than other Bank of England policymakers. Photograph: Henry Nicholls/Reuters

No deal Brexit could result almost zero interest rates (business)

One of the Bank of England’s policymakers stated that with interest rates at a low level of nearly zero, a no-deal Brexit could lead to a prolonged result. A member of the rate-setting monetary policy committee, Gertjan Vlieghe said that he would be prepared to cut borrowing costs in the event which the UK left the EU without any transition agreement in October this year.

The bank needs to assess which was the greater threat between recession and rising inflation due to the interest rates could move in either to the direction in the event of a disruptive no-deal scenario. However, Vlieghe stated in his speech in London that he saw greater risks of collapse in demands than the risk of inflation from the higher cost of imports.

In the aftermath of the EU referendum, Interest rates were cut to 0.25%. However, since then the rates have raised twice to 0.75%. Vlieghe said that he would be prepared to support something even more drastic than the emergency rate cut which was announced on August 2016. As Vlieghe’s comments go further than other Bank of England policymakers, many have signaled that interest rates would need to be cut in the case of no-deal Brexit. Since Theresa May announced that she left her title as prime minister behind, Britain’s probability to leave the bloc without a transition has shown.