BoE adviser: post-Brexit UK would be “thoroughly investable”
Fears around Brexit are unlikely to deter investors in the UK, according to an external member of the Bank of England's Financial Policy Committee.
Addressing Parliament's Treasury Committee earlier today, FPC member Richard Sharp today said that he held concerns around assumptions used in the Monetary Policy Committee's most recent inflation report.
“Having looked at some of the modelling and some of the assumptions that went into the report, I might have slightly different, nuanced view of some of the risks associated.
“For example, one of the issues is associated with the risks of external capital flows. The UK is a thoroughly investable economy and would remain a throughly investable economy whichever way the vote goes, by any global standard,” Sharp said.
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Last week, Standard and Poor's warned that a Brexit vote could hit investment into UK infrastructure, while the inflation report recently warned that firms may delay investment in the aftermath of a vote to leave the UK in the event of a vote to leave.
Sharp is one of four external members on the FPC, and a former chair of Goldman Sachs' principal investment business in Europe. He is currently a partner at investment firm Roundshield Partners, alongside other roles.
“I've seen significant flows coming into the UK, unaffected by concerns about Brexit, from US endowments for example, and where I might disagree with the Governor [the BoE's Mark Carney] is that I don't think it's the kindness of strangers.
“I think strangers make a calculated risk-reward assessment, and they would continue to view the UK as an extremely good risk by any global measure,” he said.
Nonetheless, Sharp stressed that he remained in agreement with the stated view of the Bank of England that a Leave vote would remain a source of short term instability.
“The Governor hasn't made any comments on longer term stability. And clearly that is an issue where we have to have some concerns as the FPC, and if we see long-term instability then we will discuss that,” Sharp said.