Governor of the Bank of England Mark Carney said that the consequences of uncertainties regarding Brexit are becoming apparent as lacking clarity of future relations with the European Union is having impact on some companies’ decisions to enter new markets or make investments.
MOSCOW (Sputnik) — The consequences of uncertainties regarding Brexit are becoming apparent as lacking clarity of future relations with the European Union is having impact on some companies’ decisions to enter new markets or make investments, Governor of the Bank of England Mark Carney said Thursday.
“I think it is evident… that uncertainties about the eventual relationship [with the EU] are weighing on the decisions of some businesses… Around 40 percent of these businesses are affected in some way, either through the supply chain or end markets by uncertainties around Brexit. We see it directly in the macroeconomic numbers. Investment has been weaker than we otherwise would have expected in a very strong world, high degrees of profitability, ample availability and low cost of capital and limited spare capacity. The consequence of that is starting to build,” Carney told a press conference.
The governor noted that decrease in investment could impact the monetary policy.
“Deferral of investment is going to mean that the supply capacity of the economy expands at a slower rate. The speed limit, if you will, of the economy has slowed… That could have consequences for monetary policy, depending on the evolution of demand,” Carney said.
On June 23, 2016, the United Kingdom voted to leave the European Union in a referendum. Brexit negotiations between the United Kingdom and the European Union officially kicked off on June 19, and are due to be completed by the end of March 2019.