Bank of England expected to issue more Brexit warnings this week
The Bank of England is expected this week to issue more warnings over the EU referendum.
Governor Mark Carney has repeatedly cautioned over the potential impact over a so-called Brexit.
And more warnings are on the cards this week, with the Bank publishing its inflation report on Thursday.
Read more: Britain won't take a pounding if it goes for Brexit
The Bank is also expected to keep interest rates on hold for the 86th month in a row.
IHS Global Insight's chief European and UK economist Dr Howard Archer said the Bank is likely to “sit tight… despite now highly compelling evidence that UK economic activity is faltering markedly amid heightened uncertainties ahead of June's referendum on EU membership”.
The Bank is also expected to slash its forecasts this week, possibly cutting expectations to below two per cent growth this year. This would be down from a forecast of 2.2 per cent in February.
IHS Global Insight has cut its forecast to 1.8 per cent.
Read more: Carney: City would lose business after Brexit
Meanwhile, the Sunday Times reports that banks have been told to prepare for a rate cut, indicating the Bank could be preparing for the aftermath of a Leave vote in the referendum.
One bank chief executive told the paper he had been invited for an “informal discussion” and asked whether his company's balance sheet could tolerate a rate reduction. Another bank boss told the paper: “This is something the Bank has been suggesting for some time.”
Last month, Carney was forced to defend the Bank's Brexit warnings, telling the House of Lords he would continue to do so.
He said: “The Bank must assess the implications of the UK’s EU membership for our ability to achieve our core objectives of maintaining monetary and financial stability.”
“The Bank has a duty to report our evidence-based judgments to Parliament and to the public. That is the fundamental standard of an open and transparent central bank."
Carney added: “Assessing and reporting major risks does not mean becoming involved in politics; rather it would be political to suppress important judgments which relate directly to the Bank’s remits and which influence our policy actions.”
He also suggested Canada would suffer as a result of a Brexit. Membership of the EU, he said, “undoubtedly reinforces” London's position as the “pre-eminent financial centre”.
He warned that a Brexit would make it “less likely that London would retain its position”.