Tuesday 22 August 2017

Bank of England boss predicts a tough year ahead for British households

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British households will face a difficult year, Bank of England governor Mark Carney has warned - underpinning its decision to keep interest rates on hold.

While the BOE governor said policy makers had assumed the UK's departure from the EU would unfold smoothly, he noted the uncertainties surrounding that process and said real wage growth would remain weak for now. "This is going to be a more challenging time for households," Mr Carney said at a press conference in London. "Wages won't keep up with prices for goods and services they consume."

On the upside, the UK's Monetary Policy Committee's published decision stated that policy makers may need to raise interest rates faster than the market suggests.

Mr Carney said he expected real wage growth would eventually pick up, but that there would be "consequences" if it didn't.

He added that the bank hadn't tried to gauge what a messier Brexit outcome would look like: "We would have had to do an alternative forecast, and we have not done that."

The news sent the pound lower.

Irish Independent

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