BoE Governor Mark Carney said in a Bloomberg interview that the world could choose between a “low road of protectionism focused on bilateral goods-trade balances” and a “high road of liberalization of global trade in services.” But he warned that the “low road will cost jobs, growth, and stability”. Meanwhile, the “high road can support a more inclusive and resilient globalization.” Carney said that the trade actions taken by Trump as of June had small impacts. But “a larger increase in tariffs would have a substantial impact”.
Domestically, Carney said that it’s “more likely than not” that the equilibrium interest rates have risen. But “any given jurisdiction has to take into account its own domestic forces, whether there are headwinds from fiscal policy, headwinds from uncertainty, headwinds from trade discussions or other factors.”
He also played down the chance of other EU countries replicating London’s success as a global financial center. He said, “in some circles in Europe there is a greater predisposition to ring-fence financial activities,” and “that could lead to a very large but effectively local financial center in Europe, as opposed to a global financial center, which I believe London will continue to be.”
