Carney: Banks are robust enough for disorderly Brexit

9/14/2018, 12:10 PM
Carney: Banks are robust enough for disorderly Brexit

Mark Carney, governor of the Bank of England, claimed the institution is well prepared for any shift in economic conditions including "a wide range" of options for the United Kingdom's withdrawal from the European Union. Speaking in Dublin on Friday, he vowed to respond to any changes in the outlook with the determination to return inflation up to the target 2%. In his remarks, which follow reports that he has warned the government a so-called no-deal Brexit would be catastrophic, the top rate-setter asserted the largest banks can withhold such an impact.

The governor, whose term was recently extended until the end of January 2020, still added the possibility of ending negotiations with the EU without an agreement is "unlikely." The reaction to a disorderly Brexit "is not automatic," he asserted and cited the effects on demand and supply and the exchange rate as factors.

In Carney's view, inflationary pressures point toward the objective and pay growth is adding pace. Still, he repeated that policymakers consider the process of leaving the EU to have the strongest influence on the economy, where uncertainty is impacting productivity growth and dampening wage inflation.

Breaking the News / IT