Bank of England confirms EU exit research

Monday, May 25 2015

There are no data releases from the UK today, with banks being closed in observance of Whit Monday. With that being the case the focus is on global concerns and possible EU exit of the UK. The Bank of England plans to assess the implications of a possible British exit from the European Union, it said in a statement, confirming an email it inadvertently sent to a newspaper about the supposedly confidential research project.

The Guardian reported that an aide to a senior Bank official said in the email the project should be kept secret from most BoE staff and any journalists asking about it should be told the Bank was looking at a broad range of European economic issues. British Prime Minister David Cameron, who was re-elected on May 7, has pledged to reshape Britain's ties with the EU before holding an in-out membership referendum by the end of 2017.

In a statement on Friday evening, the Bank confirmed its intention to launch the assessment. "It should not come as a surprise that the Bank is undertaking such work about a stated government policy," it said in the statement posted on its website. "There are a range of economic and financial issues that arise in the context of the renegotiation and national referendum. It is one of the Bank’s responsibilities to assess those that relate to its objectives."

Sterling fell at the opening of Monday's session and is currently being traded few points above 1.5480 level. Pair is likely to find support around 1.5450 handle and resistance above 1.5520 area. We cannot expect any larger movements in the rest of the session with US banks being closed in observance of Memorial Day.

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