BOE's Broadbent Says Impact of Pound's Fall Is Uncertain
March 23 2017 - 5:29AM
Dow Jones News
By Paul Hannon
The strength of U.K. economic growth in coming years will partly
depend on whether exporters respond to a weakened currency by
investing to increase their capacity, or hold back in response to
uncertainty about the future terms of the country's trade with the
European Union and the rest of the world, a senior Bank of England
official said Thursday.
The pound shed almost a fifth of its value against the U.S.
dollar in the wake of a June 2016 vote to leave the E.U. That
depreciation has raised U.K. prices of imported goods and services,
and BOE Deputy Gov. Ben Broadbent said there are already signs that
is hitting consumer spending.
But the weaker currency has also boosted pound profits for
exporters, and that may spur them to invest in new plant and
equipment so as to sell more goods and services overseas. In a
speech at Imperial College, Mr. Broadbent said exporters are in a
"sweet spot," but have reason to doubt that will last.
Write to Paul Hannon at paul.hannon@wsj.com
(END) Dow Jones Newswires
March 23, 2017 05:14 ET (09:14 GMT)
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