Bank of England Deputy Governor Dave Ramsden said the "entrenched uncertainty" stemming from Brexit that is weighing on U.K. economic growth may hinder the central bank from further easing monetary policy, The Telegraph reported, citing an interview with the policymaker.
Ramsden told the publication that the supply potential or "speed limit" of the economy has slowed through the ongoing period of Brexit uncertainty, as evidenced by falling investment and productivity.
"It's fair to say that the weakness on the supply side does make me think that there's less spare capacity opening up, so other things equal, that would mean that I see less of a case for a more accommodative monetary position," Ramsden said.
The U.K. economy unexpectedly contracted 0.1% month over month in August. Industrial production in the three months to August declined 0.4% compared with the prior three-month period, while labor productivity fell 0.5% year over year in the quarter that ended in June.
In addition to Brexit, global trade tensions have also weakened investments in the U.K., as companies delay investment decisions and await the outcome of the U.S.-China trade dispute, Ramsden said.
The deputy governor also raised concerns about the U.K.'s decade-high wage growth amid falling productivity, saying it is raising unit wage costs, in turn adding pressure on domestic inflation.
The BoE maintained its key rate at 0.75% in September, in line with market expectations.