The Bank of England predicted that the U.K.'s economic growth will increase over the next 3 years if the Brexit deal proposed by Prime Minister Boris Johnson is approved, according to The Wall Street Journal.
If Boris Johnson's Brexit deal is backed by lawmakers, the U.K. is expected to pursue a free-trade accord with the European Union which would help stimulate the increase in growth. “The picture in the U.K. could change, with the recent U.K.-EU Withdrawal Agreement creating the prospects for a pickup in U.K. growth,” Bank of England Gov. Mark Carney said.
Rate setters stated that they are prepared to cut their key interest rate if there is not a significant increase in growth. At the Bank of England's meeting this week, two of the nine members voted to cut the rate now instead of waiting for the formation of the trade plan that could take years.
“If the outcome involves a lengthy Brexit delay, under a hung parliament or Labour government, then a rate cut would look likely,” Allan Monks, an economist at JP Morgan, stated. “But a relatively quick Brexit implementation, under a Conservative government, would remove some of the current uncertainty and help to keep the BoE on hold.”
The Bank of England is predicting stimulation in the U.K. economy if Boris Johnson's Brexit deal is backed by lawmakers.