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| Brexit: Bank of England to cut interest rates says Mark Carney | Brexit: Bank of England to cut interest rates says Mark Carney |
| (35 minutes later) | |
| The Bank of England is likely to cut interest rates over the summer to combat a post-Brexit vote slowdown, the Bank's Governor, Mark Carney said today. | The Bank of England is likely to cut interest rates over the summer to combat a post-Brexit vote slowdown, the Bank's Governor, Mark Carney said today. |
| The Governor's words, in a speech at the Bank's Threadneedle Street headquarters, sent the pound instantly and sharply down against the dollar as financial market traders responded to the news of the stimulus. | |
| Ten year government bond yields also plummeted. | |
| "In my view, and I am not pre-judging the views of the other independent MPC [Monetary Policy Commitee] members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer." | "In my view, and I am not pre-judging the views of the other independent MPC [Monetary Policy Commitee] members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer." |
| Mr Carney suggested that a move to lower the cost of borrowing could come as early as July. | Mr Carney suggested that a move to lower the cost of borrowing could come as early as July. |
| "The Committee will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report. In August, we will also discuss further the range of instruments at our disposal." | "The Committee will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report. In August, we will also discuss further the range of instruments at our disposal." |
| Mr Carney described the British people's decision to leave the European Union as a "major regime shift" that would have far-reaching economic effects. | Mr Carney described the British people's decision to leave the European Union as a "major regime shift" that would have far-reaching economic effects. |
| "The decision to leave the European Union marks a major regime shift. In the coming years, the UK will redefine its openness to the movement of goods, services, people and capital. In tandem, a potentially broad range of regulations might change" he said. | "The decision to leave the European Union marks a major regime shift. In the coming years, the UK will redefine its openness to the movement of goods, services, people and capital. In tandem, a potentially broad range of regulations might change" he said. |
| However, the Governor sought to calm households and businesses about the pain of the transition. | However, the Governor sought to calm households and businesses about the pain of the transition. |
| "The UK can handle change" he said. "It has one of the most flexible economies in the world and benefits from a deep reservoir of human capital, world-class infrastructure and the rule of law. Its people are admired the world over for their strength under adversity. The question is not whether the UK will adjust but rather how quickly and how well." | "The UK can handle change" he said. "It has one of the most flexible economies in the world and benefits from a deep reservoir of human capital, world-class infrastructure and the rule of law. Its people are admired the world over for their strength under adversity. The question is not whether the UK will adjust but rather how quickly and how well." |
| The Governor was accused by senior figures in the Vote Leave campaign of crossing a political line in warning about the economic impact of a Brexit Vote. Andrea Leadsom, the Conservative MP who is running to be Conservative leader, suggested Mr Carney was influenced by his former employer Goldman Sachs. | The Governor was accused by senior figures in the Vote Leave campaign of crossing a political line in warning about the economic impact of a Brexit Vote. Andrea Leadsom, the Conservative MP who is running to be Conservative leader, suggested Mr Carney was influenced by his former employer Goldman Sachs. |
| Asked by The Independent whether he could work with such individuals if they came to power Mr Carney said: "I would be irresponsible of me, or any of my colleagues, to walk away- because those are our responsibilities under statute." | Asked by The Independent whether he could work with such individuals if they came to power Mr Carney said: "I would be irresponsible of me, or any of my colleagues, to walk away- because those are our responsibilities under statute." |