Brexit could lead to recession, says Bank of England | Business | The Guardian
The Bank of England has warned for the first time that Britain could slide into recession in the aftermath of a vote to leave the EU in next month’s referendum.
Governor Mark Carney also warned Brexit could knock the pound sharply lower, stoke inflation and raise unemployment. That would leave the Bank with a difficult balancing act as it decides whether to cut, hold or raise interest rates to counter opposing forces, Carney added.
He said there were a range of possible scenarios for the economy in the event of Brexit and these “could possibly include a technical recession” – defined as two consecutive quarters of shrinking GDP.
“A vote to leave the EU could have material economic effects – on the exchange rate, on demand and on the economy’s supply potential – that could affect the appropriate setting of monetary policy,” Carney told a news conference.
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