BoE’s Carney: Economic weakness in Q1 likely temporary

The Bank of England's governor Carney was speaking at the Society of Professional Economists' annual dinner, in London and came with the following comments:

• Likely to take similar approach to policy as after June 2016 referendum in the case of ‘disorderly’ Brexit.
• BoE can tolerate lengthier inflation overshoots, up to a point, in exceptional circumstances.
• Rates to be driven by demand in economy if Brexit is smooth.
• ‘Gentle’ path of rate hikes expected dependent on the economy. Growing faster than 1.5% trend rate.
• Could need faster rate hikes than may conditioning path if investment recovers much more strongly.
• BoE’s Carney: economic weakness in q1 was most likely temporary.
• Entering ‘critical phase’ of Brexit process, monetary policy ready for all Brexit outcomes.
• Banks have liquidity for ‘cliff-edge Brexit’.
• Forward guidance increasingly vital as a result of Brexit supply shocks.
• Uncertainty over consumer spending in short-term.

About Mark Carney

Mark Carney is Governor of the Bank of England and Chairman of the Monetary Policy Committee, Financial Policy Committee and the Board of the Prudential Regulation Authority. His appointment as Governor was approved by Her Majesty the Queen on 26 November 2012. The Governor joined the Bank on 1 July 2013