(Bloomberg) -- Bank of England policy maker Kristin Forbes said the initial effect of the Brexit vote on the U.K. economy has been “less stormy” than expected and she doesn't yet see a need for more stimulus.
“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. Reports since Britain's decision to leave the European Union show only a “modest slowing” so far, with strong consumer spending partially offsetting delays in investment and weakness in the property market, she said.
Forbes' comments stand in contrast to the central view of the nine-member Monetary Policy Committee, where most officials say another cut in the benchmark interest rate this year is likely. The BOE reduced the rate to a record-low 0.25 percent in August as part of a package of measures. Forbes opposed restarting bond buying then, though she said on Thursday she will not vote against continuing the asset purchases.
“This is not because I have changed my assessment,” but because the MPC “should not reverse a program where purchases are already underway and agreed on by the majority, barring a substantial change in economic circumstances,” she said.
Measures to strengthen the financial system will help insulate the U.K. from shocks, and global events should be less likely to translate into sharply lower growth rates, said Forbes, who will deliver the speech at an event at Imperial College in London on Thursday evening.
“This will be particularly important over the next few years as the U.K. manages its transition to a new trade regime and new relationship with the European Union,” she said.
--With assistance from Scott Hamilton
To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net.
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Emma Charlton
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