Carney press conference after BoE remains on hold

Author: Giles Coghlan | Category: News

Mark Carney 

BoE metting at 12:00GMT
  • Recent Brexit deal creates a possibility of a pick up in UK growth
  • World risks slipping into low growth, low inflation but many of these dynamics occurred first in the UK 
  • Both reduced Brexit uncertainty and stronger world economy assumed in BoE forecasts, but neither is assured
  • Now evidence that households are doing precautionary saving before Brexit 
  • Brexit uncertainties are weighing particularly heavily on business investment
  • Reduced chance of a no -deal Brexit has pushed up sterling
  • Brexit agreement reduces risk of no deal significantly
  • pick up in UK growth likely to be limited by a lack of supply capacity in the economy
  • New BoE Brexit assumptions assume transition occurs over 3 years vs previous much longer transition. 
  • UK growth in future years is helped by fiscal policy. stronger world and reduced uncertainty.
  • Fiscal policy is an upside risk to UK Growth outlook 
  • If downside risks emerge to UK economy there may be a need to provide reinforcements , but this is not pre-committing
  • As more details of post-Brexit trade talks emerge, BoE will adjust its forecasts.
  • will do what is necessary to ensure there is an appropriate hand off to my successor
  • Need to distinguish between Jan 31 Brexit deadline and when new trading arrangements take effect
GBPUSD pushing down towards 1.2800, but that level is holding for now.
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