Broadbent concluded his speech by saying: #8220;To adapt the football manager’s cliché, we can only play the economy that’s in front of us.#8221;
#8220;There’s been a persistent strain of opinion that EU withdrawal is something that necessarily means lower interest rates, or at least that it’s a reason to avoid putting them up,#8221; Broadbent said. #8220;If so, then I think the belief has been overdone.
Broadbent#8217;s speech was, coincidentally, delivered just hours after the Office for National Statistics released data showing that average output per hour — a key measure of productivity growth — increased at its fastest rate since 2011 in the last quarter.
#8220;I’m thinking in particular of allocative effects,#8221; he said. #8220;If EU withdrawal results in significant new barriers to trade between the UK and its major trading partners in the rest of Europe, one plausible consequence would be a marked shift in relative demand for UK output.#8221;
In a speech at the London School of Economics on Wednesday, Ben Broadbent, the bank#8217;s Deputy Governor for Monetary Policy, said it is not #8220;inconceivable#8221; that Brexit could lead to a #8220;sharp step down#8221; in the UK#8217;s productivity.
#8220;We saw a sharp step down in productivity growth after the financial crisis. And I think there are things involved in Brexit that, once one digs below the macro-economic surface, could potentially do the same,#8221; Broadbent said, adding that the crisis led to a slowing of productivity growth for a #8220;painfully long time.#8221;