With detailed contingency planning for the financial stability impacts of Brexit, UK companies can be confident of continued access to finance in an uncertain world. Reforms mean the UK financial system is working well. Net lending to private companies is been growing following six years of contraction. Corporate bond spreads are well below their long-run averages (Chart 13). And credit conditions among SMEs have been steadily improving. If the opportunities present themselves, UK corporates could readily draw on this finance as their balance sheets are in good health following a decade of de-levering to ratios amongst the lowest in advanced economies. 12  Turning now to monetary policy, the Bank operates within an established framework, anchored in the inflation target (Chart 14). The MPC set out in advance of the referendum how it would apply that framework, emphasising that the effects of the process of leaving the EU on inflation would depend on its impact on demand, supply and the exchange rate. The Committee has repeatedly stressed that, as a result, the implications for monetary policy would not be automatic. The MPC has also clearly set out its reaction function consistent with its remit. Under the exceptional circumstances Brexit entails (with an inflation overshoot driven entirely by an exchange rate depreciation caused a large fundamental shock), the Committee is required by its remit to balance a period of abovetarget inflation with a period of weaker growth.
Chart 4: Investment consistently weaker post-crises Average financial recession Cumulative change (per cent)  Average normal recession  20 15 10 5 0 -5 0  1  2  3  -10  4  5 Years  -15 -20 -25 -30 Source: Jordá, O., Schularick, M. and Taylor, A. (2013), ‘When Credit Bites Back’, Journal of Money,Credit and Banking, Vol. 45, Issue s2. Notes: The chart shows the cumulative change in per capita investment. The grey shaded area shows a 95% confidence interval around the average normal recession. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Chart 5: UK, US and euro-area capital overhangs being worked off  UK capital to output ratio  Euro area capital to output ratio Euro area trend capital to output ratio US capital to output ratio US trend capital to output ratio Per cent 340  Per cent 130  UK trend capital to output ratio  120  320  110  300  100  280  90 80  260  70  240  60  220  50 1995 1999 2003 2007 2011 2015  200 1995 1999 2003 2007 2011 2015  Sources: BEA, OECD, ONS and Bank calculations.