At the Inflation Report at the UK Parliament, BoE Governor Mark Carney indicated that he’s willing to stay longer at the central bank. He said it’s a “critical period” and it is “important that everyone does everything they can to help with the transition of exiting the European Union”.
He added that “even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England.”.
Carney also indicated that he has already discussed this issue with the Chancellor, Philip Hammond, and he expects an announcement to be made in due course. It’s generally taken as a hint that Carney will stay beyond June 2019, when the current term expires.
On Brexit, Carney said it’s unlikely for exiting EU without a deal. And, for now the UK economy is operating as if there will be a deal, with less than 20% of business putting in contingency plans.
Regarding impact of “no-deal” Brexit, Chief Economist Andy Haldane says it would be a “material rise in the cost of things in the shops”, particularly imported products. And that would be due to a weaker pound and higher tariffs. Haldane added that the impact could last for a few years, as history shows.
