BOE’s Haskel Warns Brexit Deal May Not End Economic Uncertainty

(Bloomberg) -- Bank of England policy maker Jonathan Haskel warned that the U.K. may not see a material pickup in investment growth even if the government secures an exit deal with the European Union this month.

Haskel, in his first speech since joining the Monetary Policy Committee last September, also said Brexit is to blame for a majority of the U.K.’s recent substandard investment performance.

He also said that for long-term investments, a Withdrawal Agreement may not be enough. Businesses need to know what the future trade relationship will be, whether there’s a customs union or free-trade area, how borders will work. There’s further uncertainty around any transition period, including whether the U.K. would need to extend it before arriving at any deal.

“Investment decisions take time to pay back and hence investment might be held back by the prospect of uncertainty at some point in the payback period,” Haskel said in a speech in Birmingham, U.K. on Monday. “At least for the next few years the prospect of low investment seems possible.”

Haskel, who joined the rate-setting Monetary Policy Committee last year, didn’t discuss how he might vote in future policy decisions in his speech.

To contact the reporters on this story: Fergal O'Brien in Zurich at fobrien@bloomberg.net;David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Brian Swint, Zoe Schneeweiss

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