Bank of England chief downplays chance of interest rate hike


Bank of England chief downplays chance of interest rate hike

The MPC, which decides on the path of United Kingdom interest rates, had dropped to just eight members from the usual nine after Bank deputy governor Charlotte Hogg was forced to resign in March for failing to declare that her brother works for Barclays.

The comments come less than a week after the Monetary Policy Committee's latest meeting, where three members unexpectedly voted to raise the benchmark rate from a record-low 0.25 percent, saying a surge in inflation outweighs the risks to growth.

The pound hit one-week low after Carney painted a bleak picture of the United Kingdom economy and said now is not the time to raise the United Kingdom interest rates.

Britain is due to leave the European Union by the end of March 2019 following last summer's referendum vote. Carney said. "But all expect that any changes would be limited in scope and gradual in pace".

However, in his Mansion House speech, Carney said: "From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment [via rate hikes]".

The speeches were originally scheduled for last Thursday, but were postponed following the tragic fire at Grenfell Tower that claimed many lives. He said the best response London and the country can give is to "renew our shared commitment - whatever our differences - to promote the common good".

A fine balance - speech by Mark Carney at Mansion House.

The Chancellor also signalled the United Kingdom would seek to maintain the "frictionless" border arrangements of the European Union's customs union for an "implementation period" after leaving the bloc.

Carney's speech comes a day after the start of talks to leave the European Union, which saw British negotiators give in to demands to discuss the terms of its divorce - including the exit fee - before any consideration can begin on the future trade deal Britain wants with Europe's common market.

The central banker identified the treatment of financial services in the Brexit talks, which started Monday, as an opportunity to put this new approach to trade into operation.

"Fragmentation of such global markets by jurisdiction or currency would reduce the benefits of central clearing". "Indeed it can damage it".