“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,” he said.
The comments sent the pound back down around 1% to $1.32 and the FTSE 100 up to around 6500, its highest level since August 2015, before the China growth scare. The FTSE 250 climbed to 16,270, while the euro/pound exchange rate dropped below 1.20 again.
“The near-term challenges facing the UK economy can’t be wished away. But they can be addressed,” Carney said. “A clear plan is needed, and its measures must be implemented with resolute determination.”
Carney also indicated there could be regulatory changes as a result of Brexit, which could have a knock-on effect in the economy.
“The decision to leave the European Union marks a major regime shift,” he noted. “In the coming years, the UK will redefine its openness to the movement of goods, services, people and capital. In tandem, a potentially broad range of regulations might change,” he said.
“The UK will redefine its openness to the movement of goods, services, people and capital,” Carney continued. In tandem, a potentially broad range of regulations might change. Uncertainty over the pace, breadth and scale of these changes could weigh on our economic prospects for some time. While some of the necessary adjustments may prove difficult and many will take time, the transition from the initial shock to the restructuring and then building of the UK economy will be much easier because of our solid policy frameworks.”
