British business investment is likely to remain very weak in the near term after June’s Brexit referendum before later picking up, Bank of England Deputy Governor Jon Cunliffe said on Wednesday.
Cunliffe made his comments – which drew on last week’s updated economic forecasts from the central bank – as part of a longer speech looking at the reasons behind weak business investment.
A continued lack of access to finance for some firms, as well as a failure of businesses to lower their ‘hurdle’ rates for approving new investment in response to lower borrowing costs, could be to blame, Cunliffe said.
“Ultimately, the outlook for business investment, like the outlook for the economy more generally over the forecast period, depends largely on how households and businesses react to Brexit and on the process that accompanies it,” Cunliffe said.
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