The Bank of England has blamed Boris Johnson Brexit Deal for the downgrade of the countries economic growth.
Governor Mark Carney at a press conference said the bank held interest rates at 0.75% at a time when a political and economic growth seem to move slowly, and that is was important to take a step back and look at the bigger picture.
Mr Carney went on to say and quote “Globally, that big picture has darkened”.
The latest projection from the Monetary Policy Committee (MPC) forecast a slump of 1% in Gross Domestic Product (GDP) by end of 2022 compared to the summer of 2019.
GDP forecasts were downgraded for 2020 – 2021 while 2019 figure was bumped up. It is suggested by the committee that three quarters of the projected slump was a result of the weaker global environment and recent moves in asset prices.
It is said that the remaining quarter of the fall in projection is a direct impact of the proposed Brexit deal and the 2019 spending.
It’s a first for the Bank that a specific Brexit deal has impacted as a forecast for economic growth, basically saying the deal leaves it worst off than previous Brexit which includes Theresa May’s deal.
MPC consisting of nine members voted seven to two for leaving rates unchanged. Jonathan Haskel and Michael Saunders requested a cut three years ago.
There was a prediction from analyst that rates would be held after the looming snap election was announced. However MPC members at their last meeting suggested that they could vote to cut rates if the delay to Brexit continues.
Quote from The London Economic (Oct 17th 2019) – Journalist Jack Peat wrote “The forecasts published by the government show the agreement would strip 6.7 per cent from the UK’s expected path of GDP growth between now and 2034”.