The Bank of England has recently warned that a vote to leave the European Union might provoke a credit crunch, a heavy run on the British pound, not to mention higher interest rates for businesses as well as mortgage payers.
The country’s major financial institution points out to huge risk to financial stability, so the government needs to pay more attention to the tough consequences of ending a long lasting relationship with the European Union.
Though neither the Treasury nor Downing Street responded to the BOE’s statement, the chancellor and the prime minister will undoubtedly find this crucial assessment crucial extremely useful, because they are both trying to make the case for a remain vote.
Meanwhile, the BOE hasn’t provided any clear comments regarding the long-term costs as well as benefits of the United Kingdom remaining in the European Union, though the bank keeps working on plans for the expected financial turbulence in case of breaking up with the EU.
Additionally, it’s expected that the UK’s decision to leave the EU might seriously affect the euro area, heavily diminishing the prospects of further growth in the region.