February 11, 2020 / 4:14 PM / 7 days ago

Carney speaks about investment, Brexit, coronavirus

LONDON (Reuters) - Bank of England Governor Mark Carney spoke to lawmakers in the upper house of Britain’s parliament on Tuesday, little more than a month before his scheduled departure from the central bank.

FILE PHOTO: Governor Mark Carney departs at the end of his last ever Bank of England's Monetary Policy Report news conference in the City of London, Britain January 30, 2020. Jonathan Brady/Pool via REUTERS

Here are highlights of Carney’s comments to the House of Lords’ Economic Affairs Committee.

ON LOW INTEREST RATES

“We would expect that interest rates are going to be relatively low for a period of time, the foreseeable future, and that adjustments to rates will be relatively modest, or certainly upward adjustments to interest rates we would expect to be relatively modest.”

ON INVESTMENT BOOST TO ECONOMIC GROWTH

“This is an environment in which, yes, the right infrastructure, the right corporate investment projects make sense and will be necessary in order to ultimately get us out of this situation.”

ON THE BUDGET

“I would note that there is going to be a budget on March 11 and it’s possible that it will not be an austerity budget.

“The committee would have to take into account the stimulus that was potentially provided there in a future decision.”

ON PRODUCTIVITY AND BREXIT

“The judgement on productivity is more of the same in effect.

“The lack of investment in recent years and the prospect of some reorganisation of this economy as we move to the new relationship with the European Union within 12 months, with the frictions that come with that come some weight on short-term productivity.”

ON CORONAVIRUS

“In general the experience has been with pandemics that they can have quite significant impacts but much of it is recovered - not all of it - but much of it is recovered in subsequent quarters.”

ON NOT SETTING RULES FOR FINANCE AFTER BREXIT

“Being in a position, particularly for the wholesale financial services part of the business - the derivatives markets, the securities markets, the other markets - and not being at the table for the development of these rules, we would grow financial stability risks over time and in parallel competitiveness risks.”

ON EU’S ABILITY TO REMOVE EQUIVALENCE FOR UK FINANCE FIRMS

“The equivalence regime in the EU is a relatively unstable equivalence regime. In other words, equivalence can be withdrawn on relatively short notice.”

Reporting by Costas Pitas and Alistair Smout; Editing by William Schomberg

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