Bank of England Governor Mark Carney says the central bank will probably need to pump more stimulus into Britain's economy after last week's shock Brexit referendum result. ROUGH CUT: NO REPORTER NARRATION
Bank of England Governor Mark Carney says the central bank will probably need to pump more stimulus into Britain's economy over the summer after the shock of last week's decision by voters to leave the European Union. Highlights of Carney's speech, as delivered on June 30, 2016: "The result of the referendum is clear. Its full implications for the economy are not." "All this uncertainty has contributed to a form of economic post-traumatic stress disorder amongst households and businesses, as well as in financial markets - that is, a heightened sensitivity to downside tail risks, a growing caution about the future, and an aversion to assets or irreversible decisions that may be exposed to future 'disaster risk'." "It now seems plausible that uncertainty could remain elevated for some time, with a more persistent drag on activity than we had previously projected. Moreover, its effects will be reinforced by tighter financial conditions and possible negative spill-overs to growth in the UK's major trading partners." "The economic outlook has deteriorated and some monetary policy easing will likely be required over the summer. The Committee will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report. In August, we will also discuss further the range of instruments at our disposal." "Today, while the economy is more complex and our models less reliable, the Bank has identified the clouds on the horizon and can see that the wind has now changed direction."