Pound’s Brexit swing threatens to rip up BoE’s inflation outlook

Wild swings: British pound banknotes are seen at the Money Service Austria’s headquarters in Vienna. Exchange-rate swings can push inflation up to almost 3 or slow it to well below 2 by early 2020. — Reuters

LONDON: The pound’s inevitable sharp move on the final Brexit outcome will have big implications for Bank of England (BoE) policy.

Exchange-rate swings could push inflation up to almost 3% or slow it to well below the 2% target by early 2020, according to calculations by Bloomberg Economics. The direction will be determined by whether the UK leaves the European Union smoothly or without a divorce deal.