Fears that the start of Brexit negotiations will damage the economy mean that interest rates should remain at their record-low level, the governor of the Bank of England has said. Mark Carney said he would want to see how businesses, financial markets and consumers reacted to the reality of the UK’s looming departure from the EU before changing his view. The governor, who attracted criticism from Conservative MPs for the recession warnings he issued before last summer’s referendum, said the Brexit talks would have a significant bearing on whether the UK’s historically high balance of payments deficit would become more sustainable. In his delayed speech to the City of London’s elite at Mansion House, Carney explained why he was one of five of eight members voting for no change in borrowing costs. “From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment [to higher rates]. “In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and… Read full this story
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