BOE governor Mark Carney delivers the Whitaker lecture in Dublin
- Uncertainty around Brexit has had an additional dampening effect on pay growth
- But most recent pay data supports BOE's August forecasts
- Developments on Brexit are the most significant influences on economic outlook
- BOE is well-prepared for whatever path the economy takes
- That includes a wide range of potential Brexit outcomes
- Appropriate monetary policy response to Brexit is not automatic
- It will depend on the balance of effects on demand, supply, and the exchange rate
Nothing new that we didn't already know from Carney. He's just mainly reiterating that the central bank is ready to tackle any Brexit scenario that may take place. There's a lot of ifs and possible responses the BOE can take but ultimately I think consumers will bear the brunt of it should we see a disorderly Brexit materialise.
The pound will sink as inflation and cost pressures go up and if the BOE opts to tighten further in response, house prices will accelerate their fall and mortgage rates will continue to rise. That will slowly continue to suffocate consumers as consumption/savings will be brought lower from already low levels now.
That's tough.
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