BOE Broadbent Notes Euro Risk
In the clearest sign of concern among global policymakers, Bank of England member Ben Broadbent said that the central bank is ready, if necessary, to respond with adequate measures should the EU experience the worst case scenario. Although the statements may raise speculation of interest rate changes, they are more than likely alluding to further monetary stimulus. In the last two monetary meetings, Bank of England bank heads have been debating the benefits of further increasing the current asset purchase facility after adding 50 billion pounds in the beginning of February. The current asset facility totals 325 billion pounds.
Although central bank heads remain concerned over rampant inflation in the UK that could stem from the massive amount of stimulus, they are more than likely to address an EU breakup fallout as global economic expansion is likely to be negatively affected.
The recent comments by BOE member Broadbent are a followup to earlier commitments by SNB President Thomas Jordan that the central bank is hard at work building contingency plans on a break up of the EU and a buildup of further speculation driving Swiss franc appreciation.
More on the Swiss franc - SNB Weighs Contingency On Euro Troubles