It said recent actions taken by the Bank – including slashing interest rates to 0.25% from 0.5% in August – had helped support the financial system and keep bank funding conditions broadly stable.
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“The initial effect on the United Kingdom economy of the referendum has been less stormy than many expected”, she told an audience at Imperial College London, noting that the economy was in a strong position before the vote.
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.
“Looking forward, I am not yet convinced that additional monetary easing will be necessary to support the economy”, she said in the text of a speech published on Thursday.
Overall the economy appeared to be undergoing a “modest slowing”, Forbes said.
LONDON-The Bank of England has the scope to loosen policy further if the British economy weakens, the central bank’s newest policy maker was quoted as saying Wednesday, although he added he may consider the need for higher borrowing costs if wage growth accelerates.
“In the near term, the next year or two, I think the economy will slow, but perhaps not slow as much as the consensus has been expecting”, he said in his first public comments since joining the BoE.
Sterling gained against the dollar following her remarks.
The BOE reduced the rate to a record-low 0.25 percent in August as part of a package of measures.
After signs that the shock to Britain’s economy was less severe than some forecasts, economists polled by Reuters last week saw a 35-percent chance of a recession over the coming year, compared with 50-percent shortly after June’s vote to leave the European Union.
But the BoE had to watch carefully for signs that adverse effects of ultra-loose monetary policy might be starting to outweigh the benefits, Saunders said.
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In particular, she would look to see if British consumer demand remained resilient, or if businesses shed jobs. But recently they have shifted to a more favourable direction’.
