LONDON (Reuters) - Bank of England Deputy Governor Ben Broadbent said the pound’s fall after Britain voted to leave the European Union has acted as an important shock absorber for the economy, in a radio interview broadcast on Monday.
Sterling fell to its lowest level on record against a basket of currencies last week as investors became increasingly worried that Britain will lose its preferential trading terms with the EU - a so-called “hard Brexit”.
“Having a flexible currency is an extremely important thing, especially in an environment when your economy faces shocks that are different from your trading partners,” Broadbent told BBC Radio 5.
“In the shape of the referendum, we’ve had exactly one of those shocks. Allowing the currency to react to that I think is a very important shock absorber.”
Reporting by Andy Bruce; Editing by Kim Coghill