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Leave says Bank of England 'risks economy instability' after MORE anti-Brexit predictions

Economy:
Leave says Bank of England 'risks economy instability' after MORE anti-Brexit predictions

THE Bank of England could spark financial instability in Britain with its claims over the economy and a vote to leave the European Union, according to critics.

Policymakers at the instution today claimed the housing market is being hit by the upcoming referendum and that next week's vote continues to be the biggest risk to the economy.
Bank Governor Mark Carney and other members of the Monetary Policy Committee (MPC) said home sales and other investment decisions were being postponed ahead of the June 23 vote, in minutes released from their monthly meeting to make the warnings.
The MPC also said the pound is likely to take a sharp hit if Britain votes to leave, while unamiously voting to keep the base rate at 0.5 per cent.

Vote Leave's Andrea Leadsom told the BBC: "[The Bank's]Overriding objective is to ensure financial stability. This intervention is designed to do the exact opposite."
"What the Bank of England is doing is rather than saying we have the tools at our disposal to be able to deal with any eventuality, they are instead going along with those forecasts that say there will be some kind of meltdown and there just is not the evidence for that. "
As well as political uncertainty, increased taxes on landlord buyers are thought to be large factor behind slower house price growth seen in recent months.
However, the Bank now appears to have conceded a Brexit is now more likely as the MPC referenced plans should Britain vote to leave Europe on June 23.
UK banks would be given access to extra funding should it be needed in a measure similar to that outlined by the European Central Bank (ECB), said the financial policymakers.

It comes as Bank Governor Mark Carney insisted he has every right to comment on the economic impact of withdrawal after exchanging a war of words with leading Leave campaigner Bernard Jenkin.

Vicky Redwood, chief UK economist at Capital Economics, said: "The minutes of the meeting warned that uncertainty ahead of the vote was delaying some investment and business decisions and also making it hard to judge the underlying strength of the recovery.

"the minutes also echoed the MPC's previous comments that a Brexit could materially affect the outlook for output and inflation and push the pound down sharply.

"Indeed, they contained a summary of the Bank of England's contingency planning for the referendum, including the provision of extra liquidity to banks if needed."

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17 June 2016, 9:00