Mark Carney weighs up his next move
The Bank of England made a historic cut to the interest rates earlier this month but what are the immediate implications it will have on the UK economy.
Being Bank of England governor has always been a powerful role, but in post-Brexit Britain the job has taken on another dimension.
It was interesting that on the day the referendum result was announced, it was Mark Carney who was the first authority figure to take to the lectern after David Cameron’s announcement that he was stepping down.
Despite Carney’s contested approach to forward guidance, markets continue to look to the Bank governor on how the central bank plans to guard against any potential Brexit related volatility, or drop-off in business and consumer sentiment.
Carney set the ball rolling earlier this month with the Bank’s package of measures to stimulate growth, including boosting its quantitative easing programme and providing assurances to banks on lending rates.
Here we talk to Capital Economics UK economist Paul Hollingsworth about why the Bank made the decisions it did, and the data it will be looking at to inform the timing of further rate cuts.
He explains how interest rates have become a relatively blunt tool, and discusses how the Bank will be watching whether businesses are delaying investment in the short-term or postponing spending for the foreseeable future.