Britain to Face Inflation, Recession Risks due to Brexit
TEHRAN (Tasnim) – Britain will face two key challenges, inflation and recession, after Britons voted to leave the European Union, or Brexit, European Central Bank Governing Council member Francois Villeroy de Galhau said Sunday.
"In the short term there is a difficult challenge for the British economic and monetary policy between two contradictory challenges: there is the challenge of inflation, with the effects on inflation of the fall of the pound, which is down 11 percent since Brexit," Villeroy told a business conference in Aix-en-Provence in southern France.
"And then there is recession challenge with the tendency to see less growth due to the uncertainty impact on investments. And it is always very complicated for monetary and economic policy to be caught in this dilemma."
Britain's vote to leave the European Union in last Thursday's referendum reverberated through financial markets, with the pound falling to its lowest level in 31 years, despite government attempts to relieve some of the confusion about the political and economic outlook, Reuters reported.