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| Bank of England warns of EU referendum risks | Bank of England warns of EU referendum risks |
| (35 minutes later) | |
| The Bank of England's Financial Policy Committee says that the outlook for financial stability has deteriorated since November. | |
| The committee said "the most significant" domestic risks to financial stability were connected to the referendum on EU membership. | The committee said "the most significant" domestic risks to financial stability were connected to the referendum on EU membership. |
| It referred to risks of a period of "heightened and prolonged uncertainty". | |
| It doesn't say explicitly that it has in mind the period after a vote in favour of leaving the EU. | It doesn't say explicitly that it has in mind the period after a vote in favour of leaving the EU. |
| But that is the most likely scenario the Financial Policy Committee (FPC) is referring too. | |
| The result of that uncertainty, the committee judges, could "affect the cost and availability of financing for a broad range of UK borrowers". | The result of that uncertainty, the committee judges, could "affect the cost and availability of financing for a broad range of UK borrowers". |
| These pressures could, the FPC says, reinforce existing vulnerabilities. | These pressures could, the FPC says, reinforce existing vulnerabilities. |
| The UK's current account deficit (that's the trade in goods and services plus some financial transactions) remains high, and it needs to be financed by foreign investment. | The UK's current account deficit (that's the trade in goods and services plus some financial transactions) remains high, and it needs to be financed by foreign investment. |
| Those flows have contributed to meeting the borrowing needs of the government and business, the statement says. | Those flows have contributed to meeting the borrowing needs of the government and business, the statement says. |
| The Bank also says a decision to withdraw "could spill over to the euro area", affecting financial markets and economic growth there. | The Bank also says a decision to withdraw "could spill over to the euro area", affecting financial markets and economic growth there. |
| It also notes that sterling could be forced lower, though that has potential benefits - making British industry more competitive and raising the cost of imports, which would arguably be welcome at a time when inflation is well below the Bank's target. | It also notes that sterling could be forced lower, though that has potential benefits - making British industry more competitive and raising the cost of imports, which would arguably be welcome at a time when inflation is well below the Bank's target. |