Bank of England Gov. Mark Carney is delivering a speech on Thursday, a week after Britons voted to leave the European Union, the central bank said Wednesday. Carney stepped in to soothe financial markets Friday in the immediate aftermath of the shock Brexit vote, pledging the BOE would backstop the financial system with at least £250 billion ($334 billion) of loans to banks that needed them.
And, as many suspected, he just announced that the BOE will likely ease further over the summer:
- BOE CARNEY: SOME MONETARY POLICY EASING LIKELY OVER SUMMER
- BOE CARNEY: MPC WILL DISCUSS FURTHER POLICY INSTRUMENTS IN AUG
- CARNEY: BOE MPC INITIAL ASSESSMENT JULY, NEW FORECASTS AUG IR
- BOE CARNEY: FACES TRADE-OFF STABILISING GROWTH, JOBS, OUTPUT
- BOE CARNEY: MONETARY POLICY CAN’T FULLY OFFSET NEGATIVE SHOCK
- BOE CARNEY: UNCERTAINTY DRAG MAY BE GREATER THAN FORECAST
- BOE CARNEY: PLAUSIBLE UNCERTAINTY ELEVATED FOR SOME TIME
- CARNEY: BOE POLICY TO JOIN UP MACRO-PRU, REGULATION, MONPOL
- BOE CARNEY: IF BANK RATE TOO LOW CAN HIT CREDIT AVAILABILITY
- BOE CARNEY: MATERIAL SLOWING DUE BREXIT NOW CENTRAL FORECAST
- CARNEY: BOE TO OFFER WEEKLY INDEXED LONG-TERM REPOS TO END SEP
Here are the key sections:
Even before 23rd June, we observed the growing influence of uncertainty on major economic decisions. Commercial real estate transactions had been cut in half since their peak last year. Residential real estate activity had slowed sharply. Car purchases had gone into reverse. And business investment had fallen for the past two quarters measured. Given otherwise accommodative financial conditions and a solid domestic outlook, it appeared likely that uncertainty related to the referendum played an important role in this deceleration.
It now seems plausible that uncertainty could remain elevated for some time, with a more persistent drag on activity than we had previously projected. Moreover, its effects will be reinforced by tighter financial conditions and possible negative spill-overs to growth in the UK’s major trading partners.
In my view, and I am not pre-judging the views of the other independent MPC members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer.
The Committee will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report. In August, we will also discuss further the range of instruments at our disposl.
HIs full speech can be found here. Watch him live after the jump:
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