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Bank of England Takes Steps to Avoid Brexit Consequences | ASHARQ AL-AWSAT English Archive 2005 -2017
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Mark Carney has suggested that a Brexit could result in less economic growth Credit: Matt Dunham/AP Photo


Bank of England Takes Steps to Avoid Brexit Consequences

by | Jul 13, 2016 | Business |

Bank of England Takes Steps to Avoid Brexit Consequences

London–Bank of England Governor Mark Carney said that Brexit results will lead the Bank of England to take motivational procedures.

Speaking before the U.K. Treasury Committee on Tuesday, Carney denied allegations that the bank tried to frighten the British electorate into voting to remain in the European Union (EU) by using “phony forecasts and scare stories.”

British pound to dollar rate recovered yesterday following the assignment of the Prime Minister Theresa May. Analysts predict the exchange rate to move below 1.30 by the end of the year.

Investors are pricing in an 80 percent chance of a rate cut this week, up from 11 percent just before vote counts showed the “Leave” campaign had won the referendum.

Carney previously indicated that Bank of England will resort to certain procedures in order to protect the economy from being affected by Brexit.

In June 30, just a week after the referendum, Carney gave a speech where he said it was “plausible that uncertainty could remain elevated for some time” and that “some monetary-policy easing will likely be needed over the summer.”

Chief investment strategist at Blackrock Richard Turnill said Britain will fall into recession over the coming year.

Meanwhile, The Guardian mentioned that Bank of England is considering decreasing the interest rate for the first time in seven years.

Economic analysts believe that the bank wants to regain trust of the consumer and the business and will probably decrease the interest rate to 0.5%.

Carney hinted to cutting interest rate which will be announced during Thursday’s Monetary Policy Committee. Many commentators expect the Bank rate to be cut from 0.5% to 0.25% to try to stimulate the economy.