The Financial Policy Committee (FPC) had a lot on its plate at last week’s meeting, with concerns about the impact of a Brexit only adding to the long list of existing risks to financial stability. Even if the FPC chooses to stand pat again at this meeting, the big picture is that the next bit of policy action from the Bank of England will probably come from the FPC rather than the MPC.
Meanwhile, the pound came under renewed pressure last week, possibly reflecting Brexit fears. We think that the pound could rebound if the UK votes to stay in the EU. But other concerns – including the current account deficit – could prevent it from fully reversing its recent fall.
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