UniCredit's Vernazza Says Brexit Is Holding Back BOE

The transcript discusses the confusion in the market due to the Bank of England's communication strategy amidst Brexit-related economic challenges. The Monetary Policy Committee (MPC) faces a dilemma with a supply shock, inflation, and slowing growth. The bank plans to hold its position during Article 50 negotiations. The uncertainty surrounding a transition deal impacts business investment, with companies needing clarity to plan ahead.

What is one of the main challenges faced by the MPC due to the Brexit vote?

• Strengthening of the UK currency

• Increased openness of the UK economy

• Decreased inflation rates

• Higher prices due to the falling value of sterling

Why has the Bank of England decided to remain on hold during the Article 50 negotiations?

• Due to a significant increase in inflation

• To encourage more business investments

• Because of a lack of evidence of economic slowdown

• To maintain stability during the negotiation period

What is a potential consequence if the UK does not secure a transition deal?

• Businesses will have more time to plan

• The UK will face a chaotic exit from the EU

• There will be a smooth transition for businesses

• The UK will automatically remain in the EU

What is the impact of uncertainty on business investment forecasts?

• It has no effect on business investments

• It results in immediate clarity for businesses

• It causes businesses to delay investment plans

• It leads to increased business investments

How much time do businesses need to plan their contingency actions in advance?

• Six months

• One year

• Three months

• Two years