No-deal Brexit could mean near-zero interest rates – Bank policymaker

MPC member Gertjan Vlieghe issues warning during speech in London

A no-deal Brexit could result in a prolonged period with interest rates at a record low level of almost zero, according to one of the Bank of England's key policymakers.

In signs of growing Threadneedle Street concern about the fragility of the economy, Gertjan Vlieghe, a member of the rate-setting monetary policy committee, said he would be prepared to cut borrowing costs aggressively in the event that the UK left the EU without a transition agreement on 31 October this year.

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.