"The outcome of the referendum continued to be the largest immediate risk facing UK financial markets, and possibly global financial markets"
- Bank of England
The Bank of England issued a fresh warning that uncertainty about the EU referendum next week threats knocking Britain's economic growth, pushing the Pound dramatically lower, as well as presents the "largest immediate risk" for global financial markets. If Britons were to opt for exiting the world's largest trading bloc, the adverse effect could severely hamper the global economy, the BoE rate setters said. The officials again reiterated that Brexit could lead to inflation, which would increase largely on the back of a dramatic deprecation of the British currency, while the economic growth and labour market would suffer a blow from falling investments. The Pound has already dropped in the run-up to the vote as opinion polls have shown a lead for the leave vote. However, the central bank said it had contingency measures in place to deal with any fall-out from the referendum result, including the offer of more support to banks and partnerships with other central banks to keep financial stability.
BoE officials remained unanimous on the policy stance as an elevated level of volatility continues to undermine the recent macro data. Policy makers kept the benchmark interest rate at its record low of 0.5%.
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