A smooth Brexit would result in rate hike debates at the Bank of England, despite monthslong uncertainty over Brexit and a global growth slowdown, Deputy Governor Dave Ramsden told Bloomberg, ahead of a crunch U.K. parliamentary vote on a Brexit deal struck between the U.K. and EU.
BoE's guidance that "limited and gradual" interest rate increases will be needed following a smooth exit from the EU remains valid, Ramsden said in an Oct. 17 interview.
"We're not saying over what time frame, but limited and gradual is a reasonable qualitative framing," Ramsden said.
BoE's Gertjan Vlieghe recently said that a near-term Brexit agreement would stimulate investment growth and lessen ongoing uncertainty, preventing the need for monetary policy easing and eventually paving way for "gradual and limited" rate hikes.
However, another policymaker and a well-known hawk, Michael Saunders, said the central bank could cut rates even if a no-deal Brexit is avoided.
Investment and productivity should increase in the event of a deal, said Ramsden, who remained flexible about potential policy moves.
"I'm not leaning in one direction in the entrenched uncertainty world," he told Bloomberg.
U.K. Parliament is set to vote on the new deal this weekend, but with Northern Ireland's Democratic Unionist Party not on board, there is uncertainty about the fate of the deal.