UK can weather Brexit fall-out without more interest rate cuts, says MPC member


A key Bank of England policymaker has said that further economic stimulus is unnecessary, given that the effects of Brexit have been "less stormy" than expected.

In a speech delivered at Imperial College London on Thursday, external monetary policy committee (MPC) member Kristin Forbes defended the Bank's post-referendum easing measures but stressed that there was no need for further action. 

"The initial effect on the UK economy of the referendum has been less stormy than many expected," Ms Forbes said. 

Property market weakness and evidence of delayed corporate investments have been partly offset by "strong consumer spending" and a potential uptick in net exports, she explained. 

"The economy is experiencing some chop, but no tsunami." 

"Looking forward, I am not yet convinced that additional monetary easing will be necessary to support the economy," she added. 

Ms Forbes is one of nine voting members of the MPC, and is widely seen as one of the more hawkish rate-setters.

Ms Forbes voted in favour of cutting the Bank's key interest to a record low of 0.25% in August, and introducing the new Term Funding Scheme in a bid to cut borrowing costs.

However, she stopped short of supporting corporate bond purchases and extending the Bank's quantitative easing (QE) programme. 

"The adverse winds could quickly pick up - and merit a stronger policy response. But recently they have shifted to a more favourable direction," she said.