BOE’s Haldane Says Brexit Uncertainty Lifting From Economy

(Bloomberg) -- Most of the Brexit uncertainty that has been overshadowing the U.K. economy has lifted, although it’s too early to say business investment is fully returning, according to Bank of England Chief Economist Andy Haldane.

A “big chunk, if not all” of the uncertainty has dissipated, Haldane said in answer to questions following a speech at Bloomberg’s European headquarters in London Monday. That’s contributing to investment starting to pick up, but it’s “too early to declare victory,” he said.

Recent surveys on manufacturing, housing and consumers have improved , indicating the economy is beginning to bounce back after a year of huge political uncertainty related to Brexit. The Bank of England left interest rates unchanged last month, and the better economic numbers are undermining the argument of dovish policy makers that a cut is needed to support growth.

Bloomberg Economics forecasts that the BOE won’t change its benchmark at all this year, holding it at 0.75%.

There are still Brexit risks, however. While Britain managed to agree a withdrawal deal with the European Union, it still has to negotiate a new trading relationship by the end of this year. The outbreak of the coronavirus could also weigh on global growth, with repercussions for the U.K.

Globally, the economy has grown stronger since the financial crisis more than a decade ago, Haldane said. Banks’ balance sheets are in better shape and he doesn’t see a buildup of new asset bubbles. While trade has been hurt by U.S.-China tensions, it will unlikely lead to a “wholesale retrenchment” of globalization, he said.

To contact the reporters on this story: Lucy Meakin in London at lmeakin1@bloomberg.net;Jill Ward in London at jward98@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Alaa Shahine

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