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July 2016

BoE considers interest rate cut

Published: Tuesday 12 July 2016

Facing the Treasury Committee today, Carney said that the expected hit to Britain's economy from last month's decision to exit the EU could prompt the Bank to provide more stimulus.  He told lawmakers: "There always could be monetary response."  Whether this is this Thursday or in August remains to be seen.  According to a survey in the Financial Times however, markets have already priced in a 75% chance of interest rates being cut from 0.5% to 0.25% this week.
 
Quizzed over what position the Bank’s should take on the referendum, Carney reaffirmed that there was no bias – only concern that a Brexit vote could cause a material slowdown in the economy, even a chance of a recession.  Echoing this, BlackRock, the world’s largest asset manager, said today that Britain will fall into recession over the coming year.
 
The Pound hasn’t moved much today and all focus rests on Thursday’s Bank of England rate decision meeting. 

Latest FX news by Joe De Berniere

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