Reduction in Trade Between UK and EU Would Lead to Higher Prices

A reduction in trade between Britain and the European Union would harm both economies and causes prices to rise, Bank of England Deputy Governor Ben Broadbent said on Tuesday, without addressing the outlook for interest rates.

In a speech that focused on the benefits of globalisation, Broadbent warned that less trade with the EU would damage Britain’s comparative advantage in exports of financial and business services.

At the same time, Britain would end up having to produce more of the things it currently imports from the EU and is less good at creating.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.