LONDON, Jun 24 – The Bank of England will take “all necessary steps” to ensure monetary and financial stability after Britain’s decision to leave the European Union, it said Friday (June 24). It in a brief statement following Thursday’s referendum vote said the Bank of England (BoE) is monitoring developments closely.
“It has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks. In the meanwhile, the BoE will take all necessary steps to meet its responsibilities for monetary and financial stability.”
It added that it had already “undertaken extensive contingency planning” and was working closely with Britain’s Treasury as well as with other domestic authorities and central banks. The announcement came after the Bank of Japan said it stood ready to work with other major central banks to inject ample liquidity to counter wild volatility in markets.
The British pound collapsed on Friday to its lowest level in more than three decades, and there was chaos also on equity and oil markets as the Brexit vote sparked a wave of panic across trading floors. Britain has voted to leave the European Union by 52 per cent to 48 per cent, results from all 382 of the country’s local counting centres showed.
“The last time I remember central banks acting in a coordinated way to support the economy and markets was in 2008 when the Federal Reserve, BoE and European Central Bank all cut interest rates,” said analyst Craig Erlam at trading firm Oanda. “Should we see a similar response in the coming days or weeks, it could signal just how drastic a scenario Brexit actually is, at least in the short to medium term.”