BOE’s Carney on Brexit, Trade Tension, U.K. Economy: Statement
Bank of England Governor Mark Carney speaks at a news conference in London about the chance of a no-deal Brexit, the global effects of trade tensions, and the outlook for the U.K. economy.
This is the opening statement of Carney’s news conference in London following publication of the central bank’s quarterly inflation report.
How is the escalation of protectionist policies by major economies impacting the U.K. economy?
Mark Carney, Governor of the Bank of England (BOE), has made a statement regarding the challenges currently facing the U.K. economy. The ongoing uncertainty surrounding Brexit and trade tensions between major economies are causing significant volatility and risk. However, the BOE remains committed to its mandate of maintaining financial stability while supporting the U.K.’s economic growth.
On Brexit, Carney emphasized that the lack of clarity regarding the U.K.’s future relationship with the EU is weighing on the economy. The BOE has repeatedly warned of potential negative consequences of a “no deal” Brexit, including disruptions to trade and financial markets. Carney reiterated that the BOE will take whatever action is necessary to ensure stability, including potentially adjusting monetary policy.
In terms of trade tensions, Carney acknowledged that the escalation of protectionist policies by major economies such as the U.S. and China is exacerbating economic uncertainty. This uncertainty is negatively impacting investment and consumer confidence in the U.K. economy. However, Carney noted that the BOE’s inflation-targeting framework provides a buffer against external shocks, and the Bank is monitoring the situation closely.
Despite these challenges, Carney highlighted positive developments in the U.K. economy, such as low unemployment, strong wage growth, and continued demand for goods and services. The BOE has forecasted a moderate expansion of the U.K. economy in the second half of 2019, assuming an orderly Brexit.
Carney concluded by reiterating the BOE’s commitment to maintaining stability and supporting economic growth. However, he stressed that the ultimate outcome of Brexit remains uncertain and depends on political negotiations, making it impossible to accurately predict the long-term impact on the economy.
In conclusion, Carney’s statement indicates that ongoing uncertainty regarding Brexit and trade tensions continue to pose significant challenges to the U.K. economy. While the BOE stands ready to take action if necessary, the ultimate outcome of these challenges remains uncertain.