The Bank of England has warned that uncertainties related to Brexit have “intensified” over the past few weeks and are weighing on U.K. economic growth.
As the bank kept its main interest rate unchanged at 0.75 percent, its nine-member rate-setting panel also said Thursday that the uncertainties are weighing on financial markets, including stocks and the pound.
Last month, the bank warned that in a worst-case scenario involving Britain crashing out of the European Union in March without a deal and without a transition to smooth the process to a new trading relationship, the British economy could shrink by a massive 8 percent within a few months.
The Swiss government has approved an agreement with Britain for the two countries to safeguard the rights of each other’s citizens after the U.K. leaves the European Union.
Switzerland isn’t an EU member but is surrounded by members of the 28-nation bloc and is closely tied to it by an array of bilateral agreements. It is part of Europe’s passport-free travel zone, the Schengen area, and allows EU citizens the right to live and work in the country.
Switzerland’s governing Federal Council said it has approved a deal with London to safeguard for life the existing residence rights of Swiss citizens living in Britain and Britons living in Switzerland. It also covers their entitlement to social security and recognition of professional qualifications.
Britain is due to leave the EU March 29.
British lawmakers are heading off for a holiday break with visions of Brexit dancing in their heads, and a big decision to make.
Parliament breaks up Thursday for a 17-day Christmas recess, with no decision on whether to approve the government’s divorce deal with the European Union.
Prime Minister Theresa May postponed a vote on the deal last week to avert heavy defeat. It has been rescheduled for the week of Jan. 14, but opposition remains strong across the political spectrum.
Amid the impasse, Britain and the EU have triggered plans to try to limit the economic chaos if Britain leaves the bloc on March 29 with no deal.
The government hopes the prospect of a disruptive Brexit will persuade lawmakers to vote for May’s deal when they come back.
