Bank of England Holds Base Rate at 0.75% But Saunders and Haskell Voted for Cut

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    Helmholtz Watson

    The Bank of England voted 9 to 0…


    Helmholtz Watson

    BoE Chairman Carney press conference

    Recent Brexit deal creates a possibility of a pick up in UK growth
    World risks slipping into low growth, low inflation but many of these dynamics occurred first in the UK
    Both reduced Brexit uncertainty and stronger world economy assumed in BoE forecasts, but neither is assured
    Now evidence that households are doing precautionary saving before Brexit
    Brexit uncertainties are weighing particularly heavily on business investment
    Reduced chance of a no -deal Brexit has pushed up sterling
    Brexit agreement reduces risk of no deal significantly
    pick up in UK growth likely to be limited by a lack of supply capacity in the economy
    New BoE Brexit assumptions assume transition occurs over 3 years vs previous much longer transition.
    UK growth in future years is helped by fiscal policy. stronger world and reduced uncertainty.
    Fiscal policy is an upside risk to UK Growth outlook
    If downside risks emerge to UK economy there may be a need to provide reinforcements , but this is not pre-committing
    As more details of post-Brexit trade talks emerge, BoE will adjust its forecasts.
    will do what is necessary to ensure there is an appropriate hand off to my successor
    Need to distinguish between Jan 31 Brexit deadline and when new trading arrangements take effect

    Helmholtz Watson

    BOE Carney press conference … rolls on

    Global growth as well below trend, we are close to where we moved to something that starts to feel like a recession
    There our growing questions whether some global supply chains are sustainable given trade tensions
    all forms of protectionism are becoming more pervasive persistent and damaging than expected a few years ago
    over time trade concerns can reduce global supply capacity and growth
    on balance we think world economy is stabilizing

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