NEW YORK, Sept 10 (Reuters) - The recent drop in long-term bond yields below shorter ones in key sovereign bond markets is not “a vote of confidence” in the economic outlook, the head of the Bank of England said on Tuesday.
While it is easier now to invert developed nations’ yield curves than it had been previously, it is still no positive signal for the economy, Bank of England Governor Mark Carney said at an event in New York.
Yield curves in the United States and Britain inverted for a while in the last month. In the U.S. case, the phenomenon has stood as a reliable precursor to economic recession, although its track record is less consistent elsewhere.
Carney, speaking a day after the British parliament blocked Prime Minister Boris Johnson’s latest bid for early elections there amid the ongoing Brexit standoff, also said business investment in Britain is tracking at a 25% slower pace than it was before the 2016 Brexit referendum. (Reporting by Jonnelle Marte and Kate Duguid Writing by Dan Burns Editing by Chizu Nomiyama)