It’s a hold. Bank Rate remains at 0.75%.
With so much up in the air, the Bank of England’s Monetary Policy committee has decided to sit on its hands.
By contrast, businesses appear to be busy assuming the brace position for a chaotic, no deal departure from the EU.
According to the Bank’s Decision Maker Panel survey of 200 companies, 80% now say they are ready - or at least as ready as they will ever be - for an abrupt withdrawal, sans deal, sans transition. Two months ago only 50% said they were prepared.
Companies are variously building cash reserves, stockpiling, reserving warehouse space, sourcing alternative suppliers, applying for certification, opening operations elsewhere in EU, hedging against sharp movements in the value of the pound and preparing customs plans.
Of course, the best laid plans can go awry. As the Bank points out and companies acknowledge, there is an obvious limit to what firms can do to insulate themselves from the inevitable disruption that would ensue in the event of no deal.
Companies can’t set tariffs, avoid border frictions, influence exchange rate movements or decide how certifications are recognised.
Interestingly, even those companies who consider themselves ready are of the view that a no deal, no transition scenario would whack a hole in output, employment and investment over the next 12 months.
The Bank continues to bravely assume a “smooth adjustment to the average range of outcomes for the UK’s eventual trading relationship with the EU” but, absent agreement, the default legal position remains no deal on March 29th.
Most business now appear to have assumed the crash position - one they believe will limit injury but won’t prevent it entirely.