Brexit uncertainties are becoming "more entrenched" and increasingly weighing on the British economy less than three months before the country is scheduled to leave the European Union, the Bank of England said Thursday.
Given that the growth forecast has been cut to just 1.3% this year and in 2020.
Mark Carney, Bank of England Governor: "The UK economic outlook will continue to hinge on the nature of EU withdrawal and the appropriate path for monetary policy will depend on the balance of its effects on demand, supply and the exchange rate. As a consequence, the monetary policy response to Brexit will not be automatic, and it could be in either direction."
He said the country has a one-in-three chance of slipping into recession early next year.
Mark Carney, Bank of England Governor: "The Bank has been working since the referendum to ensure that the financial system is ready for Brexit whatever form it takes. Similarly preparations by governments and businesses for no deal are vital to reduce the potentially damaging transition costs to a WTO relationship with the EU. But those preparations cannot eliminate the fundamental economic adjustments to a new trading arrangement that a no-deal Brexit would entail."
British finance minister is confident that the economy is strong enough.
Sajid Javid, British Finance Minister: "Since I've arrived at the treasury, I have turbo charged our preparations both at the treasury and helping across government to prepare for no-deal. Not because we want it, but we have to be prepared because we will be leaving on October the 31st. And today I've announced an allocation of £2.1 billion across different government departments to make sure we are properly prepared to leave with no-deal if that's what happens."
The spending announced this week means the government has in total allocated 6.9 billion euros to prepare for a no-deal exit.
The European Commission insists it will not be doing any more contingency planning to deal with the fallout before October 31.