Business Irish

Thursday 19 April 2018

Analysts tip Carney to keep cutting

Bank of England governor Mark Carney
Bank of England governor Mark Carney

Bank of England Governor Mark Carney isn't finished yet. Economists in a Bloomberg survey predict another interest-rate cut in November, adding to the stimulus unveiled this month, even as they see UK inflation busting through policymakers' 2pc target just months later.

The survey also puts the probability of Britain sliding into a recession in the next 12 months at a record 48pc, underscoring the dilemma as the BoE weighs the risk of stoking further inflation against inaction in the face of a Brexit-induced slump.

The quandary has already divided the central bank's nine-member Monetary Policy Committee, with some officials opposed to the new round of QE.

While the June decision to leave the European Union has darkened the growth outlook, it's also weakened the pound, pushing up costs for importers and forcing the BoE to look through any exchange rate-driven inflation spike.

Irish Independent

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