Brexit is to lead to a long period of sluggish growth in the UK, putting the economy in an “unusual” slowdown for years, Bank of England Deputy Governor Dave Ramsden said on Monday.
In his first public speech since becoming deputy governor in September, Ramsden welcomed the economy’s resilience after last year’s vote to leave the EU, but said the longer Brexit uncertainty persists, the more likely demand and investment growth will weaken.
The former treasury official, one of two Monetary Policy Committee (MPC) members to unsuccessfully vote against this month’s interest-rate increase, said he has a different view of the economy from the majority of his colleagues.
In his analysis, while Brexit might be holding back firms’ investment plans, uncertainty means workers are also keeping their wage demands in check.
“I consider what we are witnessing as more of a saucer-shape slowdown and pretty unusual for that,” he said in a speech in London. “Given the long horizon over which the effects of Brexit could play out, we are likely to be on the flat part of the saucer for some time.”
Other central bank policymakers were to speak later yesterday, when Deputy Governor Jon Cunliffe and external MPC members Ian McCafferty, Gertjan Vlieghe and Michael Saunders attend a hearing of parliament’s Treasury Committee.
Lawmakers did not invite Governor Mark Carney, saying that it is a “one person, one vote” panel and they want the views of other members.
Ramsden was a treasury representative at MPC meetings for a decade, and was at the government department when it last year drew up its negative analysis on the effects of leaving the EU.
Those forecasts, as well as the bank’s own views, drew the ire of pro-Brexit lawmakers, who said they were too pessimistic about the UK’s prospects.
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