AIX-EN-PROVENCE, France Britain will face two key challenges, inflation and recession, after Britons voted to leave the European Union, or Brexit, European Central Bank Governing Council member Francois Villeroy de Galhau said on Sunday.
"In the short term there is a difficult challenge for the British economic and monetary policy between two contradictory challenges: there is the challenge of inflation, with the effects on inflation of the fall of the pound, which is down 11 percent since Brexit," Villeroy told a business conference in Aix-en-Provence in southern France.
"And then there is recession challenge with the tendency to see less growth due to the uncertainty impact on investments. And it is always very complicated for monetary and economic policy to be caught in this dilemma."
(Reporting by Michel Rose, editing by Sybille de La Hamaide)
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