MPC member Gertjan Vlieghe issues warning during speech in London

A key Bank of England policymaker has warned that interest rates could be slashed to almost zero if Britain’s next prime minister opts for a no-deal Brexit.

Gertjan Vlieghe, a member of the rate-setting Monetary Policy Committee, said that interest rates could be dramatically cut from the current levels of 0.75% in order to cushion the blow of leaving the EU without a transition agreement.

Related: Bank of England’s Vlieghe: no-deal Brexit could mean near zero interest rates – business live

In a ‘no deal’ scenario, the UK would leave the single market and the customs union immediately with no ‘divorce’ arrangement in place. The European court of justice would cease to have jurisdiction over the UK, and the country would also leave various other institutions including Euratom and Europol.

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