Bank of England (BoE) deputy governor Dave Ramsden yesterday argued that interest rates would need to be hiked if the UK leaves the European Union (EU) with a Brexit deal.

Speaking at a conference in Scotland, Ramsden echoed a view previously expressed by the central bank with regards to interest rates. Earlier in the month, it signalled that “ongoing tightening of monetary policy” was appropriate, with BoE governor Mark Carney highlighting that markets were not accurately taking rate increases into consideration.

Ramsden, whose chances of replacing Mark Carney when he steps down in January 2020 are slim, yesterday said: “If we get a smooth Brexit with a transition deal… I expect growth to pick up, leading to excess demand and building domestic inflationary pressure, so that further monetary tightening is appropriate to maintain monetary stability.”

Furthermore, the BoE deputy emphasised that he was “a little more pessimistic on GDP growth than my colleagues” at the bank, stating he was “less optimistic that investment will recover as much as it does” in the BoE’s forecast.

“Unarguably, the biggest risk to the UK economy… remains that of a Brexit outcome of no deal and no transition,” Ramsden concluded.

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