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--BOE Vlieghe: Economic Slack Likely Rising
--BOE Vliege: More Stimulus Likely If Brexit Uncertainty Persists
By David Robinson
     LONDON (MNI) - Bank of England Monetary Policy Committee member Gertjan
Vlieghe said that the UK's underlying growth rate appeared to be close to zero
and that if Brexit uncertainty persists more stimulus would likely be needed.
     Vlieghe, speaking at a Money and Macro Forum event, also said that more
stimulus would likely be needed if there was a no-deal Brexit.  A Brexit deal
that was able to provide sufficient clarity for business to invest may, however,
be enough to ward off further easing.
     Following are key points from the speech:
     --"A range of ... activity indicators suggest the underlying growth rate of
the economy is now close to zero, with business investment declining outright
and consumption growth slowing," Vlieghe said.
     This near non-existent growth is likely below the economy's potential and
"has a significant impact on the monetary policy outlook."
     --Global economic headwinds from rising trade tensions are weighing on the
UK economy, although he said it was too soon to tell how trade battles will play
out.
     --Against this backdrop the shock of a no deal Brexit "is more likely to
require monetary stimulus than tightening," Vlieghe said but he added that the
policy response would not be automatic. 
     --Similarly prolonged Brexit uncertainty was "likely to keep economic
growth below potential, and require some monetary stimulus."
     --Only "A near-term Brexit deal that reduces uncertainty and gives
businesses adequate time to prepare for any future changes in the UK-EU trading
relationship" might stave off the need for monetary easing. 
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$B$$$,M$E$$$,M$$BE$]