LONDON (Reuters) – Leaving the European Union on October 31 without any transition deal would be a major economic shock, and businesses would be unable to prepare for the long-term consequences, Bank of England policymaker Michael Saunders said on Tuesday.

“No-deal Brexit would probably have a significant adverse effect on the UK’s long term growth prospects, because of reduced openness to international trade in both goods and services,” Saunders said in written testimony to parliament.

In spoken testimony at a hearing for his reappointment to the Monetary Policy Committee, Saunders said he “genuinely” believed that interest rates could move either way after a no-deal Brexit, due to the risk of a weaker pound and a major shock to Britain’s supply capacity pushing up inflation.

Financial markets expect the BoE is more likely to cut rates to support economic growth after a disruptive no-deal Brexit.