Carney indicates BOE likely to cut interest rates + possible Quantitative Easing

worldtraveller

The Bank of England is likely to have to cut interest rates over coming months to cushion the blow to the economy from the Brexit vote, its governor, Mark Carney, has said.

Carney used a speech just a week after Britain’s historic vote to leave the EU to reassure business leaders and investors that the Bank’s contingency plans were “working well” and that it was considering more measures to safeguard financial stability.

He gave the strongest indication yet that the Bank’s reaction to the market turmoil and uncertainty caused by the Brexit vote would be to cut interest rates from the current record low of 0.5%, perhaps as soon as July.

theguardian

GBP came off around 1.5% against the USD during his speech.

Possibility of more Quantitative Easing over the summer.

chucknorris

worldtraveller wrote: »

The Bank of England is likely to have to cut interest rates over coming months to cushion the blow to the economy from the Brexit vote, its governor, Mark Carney, has said.

Carney used a speech just a week after Britain’s historic vote to leave the EU to reassure business leaders and investors that the Bank’s contingency plans were “working well” and that it was considering more measures to safeguard financial stability.

He gave the strongest indication yet that the Bank’s reaction to the market turmoil and uncertainty caused by the Brexit vote would be to cut interest rates from the current record low of 0.5%, perhaps as soon as July.

theguardian

GBP came off around 1.5% against the USD during his speech.

Possibility of more Quantitative Easing over the summer.

But Crashy predicted they would be going up :rotfl:

Anthorn

I wish he would stop making announcements because every time he does that the pound drops.

I think we need to consider to what degree our economic woes are engineered to make leaving the EU impossible. I have not yet seen for example any news about what the ECB is doing.

Although I voted to leave the EU I do think that was based on false information from the leave camp and probably our only salvation is to stay in the EU. Reading between the lines I'd say that Carney is expecting the economy to go into freefall but is waiting to see what happens before making a decision. I hope he makes that decision more sooner than later.

iantojones40

It's a brilliant idea, just think how much this would "stimulate the economy"... if only we'd thought of doing this previously.

michaels

Is this the same Mark Carney who was threatening interest rate rises prior to the vote?

savingwannabe

chucknorris wrote: »

But Crashy predicted they would be going up :rotfl:

Technically they should go up as inflation will rise for certain but Carney has to calm the potential recession that will arise when everyone is unable to pay mortgage interest rates so he has had to compromise. Which is worse inflation or major defaults on mortgages? A v difficult decision/tradeoff and this will have consequences as food, oil etc prices will rise now causing problems for all the population and businesses making us uncompetitive when we are trying to sell abroad.

Carney has such a difficult job. The man really is the hero of the British economy at the moment. Trying to calm the markets down when the politicians have basically allowed us to freefall. He really does deserve a medal. Either way we are screwed in the short term and potentially long term. There are so many other aspects of the economy that are affected by a change in interest rates. It really isn't simplistic and I am v concerned for our future.

lisyloo

michaels wrote: »

Is this the same Mark Carney who was threatening interest rate rises prior to the vote?

Why is it odd that things have changed after a very sognificant decision?

Significant even.

michaels

lisyloo wrote: »

Why is it odd that things have changed after a very sognificant decision?

Significant even.

I mean he was threatening that brexit would lead to rate rises.

In general the govt would be pleased to inflate away more debt as happened 3 years ago. The collapse in inflation resulted in a very unwelcome increase in real interest rates.

And for all those boomer haters higher inflation sees a transfer back from asset holders to workers.

wotsthat

Wait until Graham hears about this.

iantojones40

savingwannabe wrote: »

Technically they should go up as inflation will rise for certain but Carney has to calm the potential recession that will arise when everyone is unable to pay mortgage interest rates so he has had to compromise. Which is worse inflation or major defaults on mortgages? A v difficult decision/tradeoff and this will have consequences as food, oil etc prices will rise now causing problems for all the population and businesses making us uncompetitive when we are trying to sell abroad.

Carney has such a difficult job. The man really is the hero of the British economy at the moment. Trying to calm the markets down when the politicians have basically allowed us to freefall. He really does deserve a medal. Either way we are screwed in the short term and potentially long term. There are so many other aspects of the economy that are affected by a change in interest rates. It really isn't simplistic and I am v concerned for our future.

Yeah OK Mrs Carney, whatever you say.

Assuming you're not joking or being ironic that is one of the most ludicrous things I've ever heard, the guy is a louche, incompetent fraud... he's not capable of doing anything other than kicking the can further down the road.
He genuinely looks scared now, as though even he realizes he is way out out of his depth.

chucknorris

savingwannabe wrote: »

Technically they should go up as inflation will rise for certain

There are no rigid rules that dictate what has to happen, it is a very fluid situation, with many variables, it isn't certain that inflation will rise at all.