Bloomberg: Carney says Brexit implications for interest rates are ambiguous
14 November 2017
The Bank of England may have to be ready to move either direction on monetary policy come March 2019, when the UK is due to formally leave the European Union.
[... ] How exit negotiations proceed and the extent of any transition -- two big unknowns at this point -- will impact the pound and bonds, supply and demand and, of course, inflation, Governor Mark Carney said in Frankfurt on Tuesday.
Echoing his remarks from the BOE’s Nov. 2 policy press conference, he said the U.K. is in “exceptional circumstances” because of Brexit and real incomes have taken a hit. But the central bank can only support the economy so much in light of the inflation overshoot, hence the interest-rate increase this month.
He also said future moves aren’t set in stone, and it all hangs on how the Brexit talks -- already up against a December deadline -- progress. [...]
Carney said he’s very much in favor of a Brexit transition deal to allow a smooth path for businesses and consumers. It would make his job easier, too, he said half-jokingly. [...]
© Bloomberg
