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Bank of England's Haldane says firms' Brexit worries 'up sharply'

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By Reuters
Bank of England's Haldane says firms' Brexit worries 'up sharply'
FILE PHOTO: Chief Economist of the Bank of England, Andy Haldane, listens from the audience at an event at the Bank of England in the City of London, London, Britain April 27, 2018. REUTERS/Toby Melville   -   Copyright  TOBY MELVILLE(Reuters)

TALLINN (Reuters) – British businesses are more worried about Brexit uncertainty than was the case a few months ago, Bank of England chief economist Andy Haldane said on Wednesday.

“While mentions of Brexit have fallen from their referendum peak, it is notable that they have picked up sharply over the past few months, with measures of uncertainty following suit,” Haldane said in a speech at Estonia’s central bank.

Haldane was referring to an analysis of businesses conversations with its network of regional staff.

Last month the BoE raised interest rates to 0.75 percent, only its second increase since before the financial crisis more than a decade ago.

Economists polled by Reuters do not expect the BoE to raise rates again until after Britain leaves the European Union in March next year.

The bulk of Haldane’s speech focused on how central bank communication could win public trust at a time of widespread distrust of traditional institutions.

He defended the central bank’s policy of ‘forward guidance’ on interest rates, which he said had given households and businesses a useful steer, even if some financial market participants found it lacking.

“Pricing interest rates in financial markets was not the main purpose of forward guidance in the first place,” he said. “By allaying fears about too-rapid a rise in rates, it is likely to have encouraged spending and supported the economy,” he added.

(Reporting by Tarmo Virki, writing by David Milliken; editing by David Stamp)