Bank of Ireland’s pension deficit takes a big Brexit hit

The Irish bank is feeling the effects of the British public's decision

Bank of Ireland’s pension deficit takes a big Brexit hit

The Bank of Ireland flag at the branch on College Green, Dublin | Image: Julien Behal / PA Archive/PA Images

Bank of Ireland revealed this morning that its pension deficit has increased in the wake of the UK's decision to leave the EU.

In a statement, the bank said that post-Brexit movements in currency markets, corporate bond yields, and interest rate cuts were among the factors which have affected these funds.

The benefit pension deficit has risen to €1.2bn from €750m in December of last year.

It was previously revealed that UK company pension deficits grew by £89bn after the referendum.

Bank of England's stimulas

The Bank of England is expected to cut interest rates later for the first time in more than seven years, in a move forced on policymakers after Britain voted to leave the EU.

The governor, Mark Carney, hinted after the referendum result that the Monetary Policy Committee (MPC) could this summer cut rates and pump cash into the economy through quantitative easing.

Such moves would be aimed at stimulating growth in an economy that was already slowing ahead of the Brexit vote.

Financial markets predict a reduction in rates from 0.5% to 0.25%.

If they are, it will mark interest rates down below the 0.5% rate introduced by the Bank at the height of the financial crisis in 2009.