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Wednesday, May 11, 2016

New MPC Member Scaremongers Over #Brexit Rates

Michael Saunders, who was chief economist at Citibank, and who will join the MPC in August has warned that the Bank of England will need to raise its key interest rate or Bank Rate to 3.5% by the end of next year if Britain votes to leave the EU.

For why?

Allegedly the pound will collapse.

Whilst this is all very attention grabbing and headline generating, it is in fact utter bollocks:

1 The markets have already priced in a #Brexit vote

2 Any economic "shocks" to the British economy following #Brexit (were one to believe the warnings from those proselytising Project Fear) will most likely be deflationary not inflationary, as such any pressure on rates will be downwards most certainly not upwards.

Rate hike fears are simply another layer of fear being added by those who want the UK to remain in the EU.

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