The Governor of the Bank of England, Mark Carney, took center stage to respond to questions from members of the press after the monetary policy committee voted unanimously to keep rates unchanged at 0.75%. The BoE also lowered its forecast for the UK’s 2019 GDP growth, cutting it by 2 points from the 1.5% forecast that had been made in May. The market had largely priced in this scenario. With the GBP already being sold off aggressively all week long, the cable took a well-needed breather by staying unmoved at just above 1.2100.
Governor Carney was largely non-committal when pressed on what the BoE’s response to a no-deal Brexit situation would be, responding as quoted by Reuters: “it depends”. Further quotes from Carney’s press conference today as reported by Reuters are as follows:
“There are limits to what we can do after a no-deal Brexit.”
“Trade tensions are causing businesses to rethink their supply chains.”
“BoE can be nimble and quick in adjusting monetary in either direction, depending on government fiscal choices.”
“Easing policy does not make sense now.”
“Economic situations faced by UK and Eurozone and United States are quite different.”
“Former Trump advisor Gary Cohn is wrong to say no-deal is preferable.”
“Highly preferable that there is some transition to whatever Brexit UK wants.”
“Possibility of fiscal stimulus could provide support to the economy, will adjust forecasts as needed when details are known.”
“No-deal Brexit would be unwelcome for the global economy.”
GBPUSD continues to respect the 1.2100 psychological support level.Don’t miss a beat! Follow us on Twitter.