Mark Carney hints at fresh interest rate cuts

1811637230754 - 19_01_2016 - BRITAIN ECONOMY BANK OF ENGLAND MARK CARNEY SPEECH

http://www.telegraph.co.uk/business/2016/06/30/pound-drops-as-bank-of-englands-mark-carney-hints-at-fresh-inter/

The Bank of England could unleash fresh monetary stimulus this summer in an effort to support the economy after Brexit, Mark Carney has said, in remarks that have been taken as a sign that policymakers are preparing to slash interest rates and release additional waves of QE.

In a speech given at Threadneedle Street, the Governor warned that the referendum result had increased uncertainty about the outlook for the UK economy, given the “major regime shift” that leaving the EU entailed.

Ahead of the vote, Mr Carney said that the monetary policy committee (MPC), which decides on monetary policy, had judged that there would “probably” need to be an increase in rates over the next three years.

However, with the UK now on a path to leaving the EU, Mr Carney said that it was his personal view that “some monetary policy easing will likely be required over the summer”. The pound fell by as much as 1.6pc on the Governor’s signs that fresh monetary easing was on its way, knocking sterling to a daily low of $1.3219.

Experts said that the MPC was likely to make its move in August, after using its July meeting to assess the initial economic impact of the referendum result. Policymakers could choose to introduce interest rate cuts, fresh quantitative easing or alternative forms of stimulus.

The Governor made clear his personal aversion to taking interest rates, currently at 0.5pc, too low. “As we have seen elsewhere, if interest rates are too low – or negative – the hit to bank profitability could perversely reduce credit availability,” he said.

———-

“In a speech given at Threadneedle Street, the Governor warned that the referendum result had increased uncertainty about the outlook for the UK economy, given the “major regime shift” that leaving the EU entailed.”

i think this rate drop would happen anyway..

“Experts said that the MPC was likely to make its move in August, after using its July meeting to assess the initial economic impact of the referendum result.”

i expect australia to do the same next month and we didnt have a brexit..

401

~ by seeker401 on July 6, 2016.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: