‘Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.’ — Mark Carney, Bank of England
The Bank of England Governor Mark Carney delivered a speech on Tuesday at the Mansion House dinner in London. The Governor said that the potential movement of the Euro-clearing centre from London to another EU-based city amid Britain’s withdrawal from the European Union would likely lead to higher costs for participants and do little for the region’s financial stability. Last week the European Commission proposed to move all Euro-clearing businesses away from London after the UK leaves the EU in 2019. The European Commission said that the following step would likely sustain financial stability in the region. In the meantime, Carney urged the EU to develop together a new form of cross-border supervisory cooperation, highlighting the high importance of free trade in financial services. Apart from that, the Governor stated that policymakers would proceed tolerating the inflation rate above the 2% target ‘to see the extent to which weaker consumption growth is offset by other components of demand’ and assess both wage and economic growth and, thus, leave interest rates on hold.
