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‘Such a modest rate cut wouldn’t prevent a UK recession’“Interest rates are already at an historical low, and the Bank has said that it is not comfortable with negative rates, so its room for maneuver is limited. It can now easily refrain from action by saying it needs more economic data.”
‘The UK is in limbo and will suffer as a result’“Theresa May saying that ‘Brexit means Brexit’ is basically meaningless unless Article 50 is invoked.,” he says “And it’s not likely to be invoked until the end of this year, or early next year, and maybe even later or not at all. The UK is in limbo and producer and consumer confidence will suffer as a consequence.”
‘Renzi’s demise would threaten the integrity of the Eurozone’“The first test will be the referendum on constitutional reform in Italy: Renzi has announced he will resign if he loses. He’s now running into political difficulties because of the Italian banking crisis which has been exacerbated by the Brexit vote. New European rules in principle would necessitate a bail-in of Italian bank bondholders. However, subordinated debt has been sold to Italian households, so a bail-in is a political impossibility.”