Bank of England Governor Mark
Carney says Britain's economic outlook “has deteriorated” due to the
country's vote to leave the European Union (EU).
Carney made the remarks in a speech to bankers and business leaders on Thursday, a week after British citizens voted in favor of a British exit from the EU, a bloc that the United Kingdom joined more than 40 years ago.
“In my view, and I am not prejudging 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,” Carney said.
“The committee will make an initial assessment on July 14 and a full assessment complete with a new forecast will follow in the August inflation report. In August, we will also discuss further the range of instruments at our disposal,” he added.
Carney suggested that the central bank would probably need to pump more stimulus into Britain’s economy over the summer.
However, he said while the central bank is likely to help the economy, monetary policy cannot immediately or fully offset the economic implications of a large, negative shock.
In the June 23 referendum, about 52 percent of British voters opted to leave the EU, while roughly 48 percent of the people voted to stay in the union.
Meanwhile, the International Monetary Fund said the uncertainty created by Brexit poses a major threat to the global economy.
The IMF chief spokesman said the uncertainty will dampen near-term economic growth for the UK and the rest of Europe and will affect the output globally.
In another development on Thursday, ratings agency Standard & Poor's cut the EU's credit score, saying that the unity of the bloc had grown more uncertain after Brexit.
"After the decision by the UK electorate to leave the EU as a consequence of the June 23 consultative referendum, we have reassessed our opinion of cohesion within the EU, which we now consider to be a neutral rather than positive rating factor," the agency said in a statement after cutting its rating to "AA" from "AA+" for the EU.
Carney made the remarks in a speech to bankers and business leaders on Thursday, a week after British citizens voted in favor of a British exit from the EU, a bloc that the United Kingdom joined more than 40 years ago.
“In my view, and I am not prejudging 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,” Carney said.
“The committee will make an initial assessment on July 14 and a full assessment complete with a new forecast will follow in the August inflation report. In August, we will also discuss further the range of instruments at our disposal,” he added.
Carney suggested that the central bank would probably need to pump more stimulus into Britain’s economy over the summer.
However, he said while the central bank is likely to help the economy, monetary policy cannot immediately or fully offset the economic implications of a large, negative shock.
In the June 23 referendum, about 52 percent of British voters opted to leave the EU, while roughly 48 percent of the people voted to stay in the union.
Meanwhile, the International Monetary Fund said the uncertainty created by Brexit poses a major threat to the global economy.
The IMF chief spokesman said the uncertainty will dampen near-term economic growth for the UK and the rest of Europe and will affect the output globally.
In another development on Thursday, ratings agency Standard & Poor's cut the EU's credit score, saying that the unity of the bloc had grown more uncertain after Brexit.
"After the decision by the UK electorate to leave the EU as a consequence of the June 23 consultative referendum, we have reassessed our opinion of cohesion within the EU, which we now consider to be a neutral rather than positive rating factor," the agency said in a statement after cutting its rating to "AA" from "AA+" for the EU.