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Carney says guidance vital as Brexit enters 'crucial' phase


Mark Carney. Photo: Reuters

Mark Carney. Photo: Reuters

Mark Carney. Photo: Reuters

Bank of England Governor Mark Carney said Brexit is entering a crucial phase, and this means his oft-criticised guidance on monetary policy is more important than ever.

After questions on the effectiveness of the central bank's communications over the last few weeks, he used a speech in London to review the history of his actions at the BoE and explain why his methods work. The pushback came just hours after his deputy, Dave Ramsden, said the bank doesn't have a communication problem, though forecasting has become more difficult since Brexit.

"Brexit is a regime shift that has markedly increased the range of possible outcomes for the UK economy and therefore the potential paths of monetary policy," Carney said.

"The dependence of policy on which Brexit path is taken is one reason why guidance remains valuable during this crucial phase."

Since the UK's 2016 vote to leave the EU, the bank has focused on the supply side of the economy, which has come under strain, reducing its potential rate of growth. With the BOE forecasting expansion slightly above that lower speed limit, it expects to keep raising interest rates gently to control unwanted inflationary pressures.


Paris 'to gain from London loss'

Paris is set to become a European financial markets hub as international banks look to France as a base for some activities after Britain's departure from the EU, Bank of France Governor Francois Villeroy de Galhau said last Friday.

He said that although Brexit was bad news for Britain and Europe, it presented a "historic opportunity" to restructure the European financial system. In the future, there would not be a dominant financial centre as London is now but rather an integrated network with centres specialised in various activities, he said.


North workers fear future

The majority of self-employed workers in the North believe Brexit will have a distinctly negative impact on the economy.

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The views of 58pc of self-employed staff in Northern Ireland were shared by those in Scotland (67pc), and London (60pc), according to a study from Kensington Mortgages. However the survey of more than 1,000 self-employed workers across the UK as a whole found nearly two-thirds (63pc) think leaving the EU will have no impact on their business - more than three times as many (20pc) as those who viewed it in negative terms.

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