Bank Of England Chief Economist Paints Bleak Post-Referendum Picture

Bank Of England Chief Economist Paints Bleak Post-Referendum Picture

Unemployment could be set to rise, the economy might slow down and the housing market could be hit following Britain's decision to quit the European Union, the Bank of England's chief economist Andy Haldane has said.

Speaking in Port Talbot, Wales, he also said that consumer confidence could be dented in the fallout over the referendum vote.

He said: "The amount of slack in the UK economy is likely to begin steadily rising in the period ahead, perhaps causing unemployment to rise. The main reason for that likely slowdown is uncertainty.

"And with uncertainty having risen sharply, caution may once more become the watchword for companies and households, as it has for most of the period since the crisis."

He also said that a "monetary response" to the economic uncertainty caused by the Brexit vote needs to be delivered in August. Experts have pencilled in a cut in interest rates from 0.5% to 0.25% and potentially an extension of quantitative easing next month.

Mr Haldane added: "Among households there are signs of a significant slowing in both confidence and in the housing market, which are often intertwined.

"The latest survey from the Royal Institute for Chartered Surveyors (RICS), covering the period since the referendum, showed the weakest three-month-ahead house price expectations balance since 2010 and the sharpest fall since 2004.

"This feels like a market braced for disappointment. And where housing leads, the economy often tends to follow."

However, Mr Haldane stopped short of forecasting a full-scale financial crisis.

He said: "Even though the economy is unlikely to crash, it is likely to slow, perhaps materially, in the quarters ahead.

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