blog header image

Posted : 03 Mar 2020 at 13:31:19
Category: News

Share this article

Bank of England governor Mark Carney has revealed his last vote as part of the Monetary Policy Committee (MPC) on whether to move the central bank’s base rate was “finely balanced”.

Carney noted that despite choosing to hold the Bank Base Rate at 0.75 per cent there were still plenty of reasons to remain cautious about the UK economy – and that the next rate move could be in either direction.

He added that the Brexit process had made a significant negative impact with quarterly growth in 2019 averaging only 0.25 per cent, around half the average in the previous three years.

Business investment rose just 1.25 per cent since the 2016 referendum, significantly below the 12 per cent average seen in the rest of the G7 over the same period.

Overall, UK growth last year was the weakest since 2010.

Writing in his annual report to the Treasury Select Committee, Carney said: “Throughout the past year, my view – shared by majority of the [MPC] – has been that the recovery in confidence and activity would be sufficiently strong without additional support from monetary policy.

“I therefore voted consistently to maintain Bank Rate at 0.75 per cent and the stock of purchased assets at £435bn at each meeting.

“At the MPC’s most recent meeting, however, my decision to hold policy was more finely balanced.”

Carney explained that while the UK economy lost further momentum towards the end of 2019, data received in January just before the MPC’s meeting was more positive.

“Reflecting these positive developments, I continued to judge that it was appropriate to maintain policy,” he said.

‘Good enough’

However, Carney, who is set to be replaced by current FCA chief executive Andrew Bailey this month, issued a note of caution.

“To be clear, these are still early days, and it is less of a case of so far so good, than so far, good enough,” he continued.

“It will be important for the hard data on activity to follow through on the recent pickup in the surveys, and for domestic price inflation to strengthen.

“Though the global economy looks to be recovering, caution is warranted. Evidence of a pickup in growth is not yet widespread. And any one of the known risks, such as a renewal of trade tensions, could reverse recent progress.”

The outgoing governor noted that the MPC expectations did not include provision for any measures in the upcoming budget and added: “Further ahead, if the economy recovers broadly in line with the MPC’s latest projections, some modest tightening of policy may be needed to maintain inflation sustainably at the two per cent target.”

Original source - Mortgage Solutions

SIMILAR NEWS

blog header image
NEWS
CONSTRUCTION GROWTH SLOWS AS COSTS “GO THROUGH THE ROOF”

The pace of construction growth slowed in August as buyers reported near record rises in input cost inflation.       The bellwether IHS Markit/CIPS UK Construction PMI Total Activ ...

blog header image
NEWS
SUBCONTRACTORS HIT OUT AT HMRC OVER SLOW VAT REPAYMENTS

Specialist contractors have hit out at HMRC over the time it takes to reclaim VAT payments following a controversial change in the tax regime earlier this year. The “domestic reverse charge&rd ...

blog header image
NEWS
LABOUR COSTS ‘BREAK RECORDS’ AS VACANCIES SOAR

Recruiters have reported “record-breaking” increases in labour costs as new data shows vacancies hitting fresh highs. Between May and July, there were 38,000 vacancies in the construction ...

blog header image
NEWS
TIMBER SHORTAGE DUE TO 'UNPRECEDENTED' POST-LOCKDOWN DEMAND

The price of timber has risen sharply with builders struggling to get supplies, as post-lockdown construction and DIY projects create huge demand. The Timber Trade Federation (TTF) said supplier ...

blog header image
NEWS
UK CONSTRUCTION FACES ‘PERFECT STORM’ AS SUPPLY SHORTAGES LOOM

UK construction is facing a “perfect storm” of growing skills and materials shortages as demand for building reaches record levels driven by home improvements, the housing market and new i ...

blog header image
NEWS
DEMAND FOR CONSTRUCTION WORKERS CLOSE TO 20 YEAR HIGH

The staff shortage in construction is continuing to bite, with 33,000 job vacancies for the period of April to June according to the latest figures from the Office for National Statistics. It is the s ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory