Home » Currency Note » Currency Note » Governor Carney denies scaremongering

Following his comments yesterday, the Bank of England’s Mark Carney was interviewed on Radio 4’s Today Programme where he was asked about the central bank’s latest Brexit analysis. Governor Carney said it was part of BoE’s job to look at what could go wrong with Brexit, then put those outcomes into a scenario to ensure the banks have more than enough capital to absorb the potential losses to the banking sector. Importantly, Carney said “It’s not what’s most likely to happen. It’s what could happen if everything goes wrong, and we use that to help make sure things go better.”

He went on to deny John Humphrys’ charge that he was playing politics and trying to scare people. He said he did not have a preference for a specific type of Brexit, though conceded that the Bank prefers a transition period (which is included in Theresa May’s current Brexit proposals). Carney went on to say that a lot of work still needs to be done in order to prepare for a no-deal Brexit.

Elsewhere, Theresa May spoke to a committee of senior MPs and told them that the government would have to reopen negotiations with the EU on the Brexit deal if the UK sought an extension to the departure process. The prime minister claimed that extending article 50 would invalidate the Brexit deal. When asked if she had been told that by the EU, May refused to answer, instead saying “What has been made clear is this is the deal that we have negotiated with the European Union.”

In the US, Michael Cohen pleaded guilty to lying to Congress. Trump’s former lawyer said that the president continued trying to develop a tower in Russia’s capital months into his campaign for the presidency. Trump responded by calling Cohen ‘weak’ and cancelled his G20 meeting with Putin, saying that Moscow’s failure to return Ukrainian ships was his reason for the decision.

In Germany, the unemployment rate came in better than expected and inflation dropped to 2.3% in November from 2.5% the previous month. Late last night, the Federal Open Market Committee released the minutes from its latest meeting and they confirmed Jerome Powell’s comments from earlier in the week. Almost all participants believe another rate hike is imminent – almost certainly in December – and rates will continue to rise, but more gradually than previously thought.

If you’re concerned about the potential impacts of significant sterling weakness on your plans, please do not hesitate to get in touch with your Personal Trader on 020 7898 0541 to find out more.

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