Carney in Bournemouth
- Global trade war and a no-deal Brexit remain growing possibilities, not certainties
- In some jurisdictions, the impact of uncertainty may warrant near-term policy response as insurance to maintain the expansion
- Tight labour market, inflation at target, prospect of greater clarity on Brexit argues for policy focused on medium-term inflation dynamics
- If Brexit progresses smoothly, limited and gradual interest rate rises would be needed
- Market places significant weight on possibility of no-deal Brexit
- The smooth Brexit assumption of MPC is increasingly inconsistent with market projections
- Inconsistencies do not mean market is wrong but highlights the extend that interest rates and sterling might rise if Brexit deal reached
- PMC will make a detailed assessment in August of potential implications of global sea change currently under way
Cable is lower on the comments as Carney points to 'uncertainty' in a similar way to other central banks. He's softly highlighting that the BOC may not need to hike as much if others are cutting.
