Highlights from BOE's Carney as he speaks before Lords committee
- We expect interest rates are going to be relatively low for the foreseeable future
- Upward adjustments to interest rates are likely to be modest
- Low interest rate environment is putting is some pressure on it UK bank margins but should be kept in perspective
- Deep structural issues driving low rates
- Low interest rate environment ads to governments and fiscal capacity
- Public infrastructure and corporate investment will be necessary to get UK out of low growth, low interest rate environment
- BOE conscious of risks of asset bubbles from low rates
- Debatable whether global financial markets have priced in lower long-term growth rates as well as lower interest rates, but this is less so in the UK bias
- we should be providing some stimulus to bring UK economy back to trend rate of growth
- market curve in the January predicts some loosening of policy, but this would lead to inflation being a little above target
The GBPUSD has moved lower through the comments from Carney (and Powell for that matter). Technically (at 11:08 AM ET/1608 GMT), the GBPUSD has moved down toward the 100 hour MA at 1.29359. The low has reached 1.30405 on the correction lower.
Him him
- friction from end of Brexit transaction will heart productivity in short-term
- if no postelection bounce, BOE may add more stimulus
- financial spillover from China coronavirus looks containable
- still very, very early days to judge coronavirus impact on economy
- much of the lost output from pandemics tend to be recovered in subsequent quarters
- economic impact of coronavirus already bigger than SARS