Michael Saunders, one of the chief executives in the Bank of England, announced that the United Kingdom might be in need of an interest rate cut. He cited the Brexit uncertainty as the main reason, though the unfavorable situation in the global financial markets is also a contributing factor.
According to the Bank of England, a no-deal Brexit will definitely strain the UK’s economy, so a rate cut would be needed to soften the blow. In addition, even if a hard Brexit is successfully avoided, during the transition period after the United Kingdom’s departure from the bloc, the country would likely still experience a negative fallout from the divorce and need support. For this reason, we can expect to see an interest rate adjustment from the BoE at their next meeting.
Meanwhile, the United Kingdom’s National Health Service is also adding to Brexit worries. More than half of the medical drugs sold and used in the UK come from the EU, as do medical supplies used in hospitals and special care centers. The government has increased its import rates in order to stockpile more drugs before October 31 than usual. However, this policy does not include drugs with a short expiration period (such as the ones used to treat cancer, for instance), nor basic sanitary supplies. In the event of a disorderly, no-deal Brexit, the UK might have a medical emergency on its hands when the EU border closes down on them.
