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MPs to quiz Mark Carney on Brexit fallout - business live
MPs quiz Mark Carney on Brexit fallout - business live
(35 minutes later)
9.58am BST
10.38am BST
09:58
10:38
Next up: Mark Carney appears at the Treasury Select Committee. Will there be fireworks as he faces his adversary Jacob Rees-Mogg, the MP and Brexit supporter ?
Carney responds to Tyrie telling him that Boris Johnson thought he had done a "superb job: "Any port in a storm, chair." #Brexit
9.56am BST
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The minutes from the Financial Policy Committee also reveal that policymakers were unanimous in the decision to cut banks’ capital requirements following the EU referendum.
Now Tyrie is asking whether Carney would agree to the publication of records of any discussions the governor had with Osborne on the matter, in order to ease any fears of political bias the public might have.
Last week the FPC lowered a capital requirement for banks, affording them greater flexibility to absorb potential Brexit-related shocks.
The governor says that he is prepared to look at how that can be done as long as it is within the public interest.
9.49am BST
Tyrie quips that lead Brexiteer Boris Johnson has credited Carney with doing a good job since the vote.
09:49
Returning to serious mode, Carney says things are different in the current era, much more transparent.
Bank of England was warned about property fund suspensions
We don’t keep things under wraps.
Bank of England was warned that investors were likely to pull large amounts of money out of commercial property funds following the Brexit vote.
10.29am BST
Minutes from the meeting of the Bank’s Financial Policy Committee on 28 June and 1 July (published here) reveal that policymakers were warned by the City regulator that funds might be suspended, which is exactly what happened.
10:29
Since 4 July, seven funds have made moves to stop withdrawals either by suspending trading or reducing the value of the fund.
Carney: I did not discuss a Brexit 'line' with Chancellor
The minutes reveal:
The governor now has the chance to defend himself against the allegations. He describes the allegations as “extraordinary”.
The FPC was briefed by the Financial Conduct Authority on the extent of outflows from these funds and on the possibility that funds could suspend redemptions in the near term.
The chair [of the FPC] does not guide conclusions. The views of the FPC are the views of the FPC.
The Bank also published two paragraphs that were redacted from the minutes of an earlier FPC meeting in March. The pars related to contingency planning in the run-up to the 23 June referendum and were deemed at the time to be against the public interest.
What was in the March record are the views of the FPC, they are not pre-judged or pre-decided.
Here are the paragraphs:
Tyrie asks whether the Chancellor sought from Carney guidance on the likely “lines” the Bank would take on the referendum.
Supervisors were engaging with banks, insurers and central counterparties on their contingency plans for risks related to the referendum, including for managing funding and liquidity risks in sterling and foreign currency.
Carney says he didn’t, that’s not the way it works.
Several firms had reported that they were conducting stress tests with referendum related strategies of varying severity.
Mark Carney looks as though he has just eaten a wasp at the Treasury Select Committee #BoE #GBP
9.28am BST
09:28
UBS boss warns about potential job moves from the UK following the Brexit vote...
#Brexit wll mean "significant" job moves, "complete reassessment" of businss: UBS https://t.co/ToDn114ECO https://t.co/peThWXise5 ~@business
9.22am BST
09:22
Nintendo shares are up more than 50% in the three trading days since its Pokémon Go game was launched.
Nintendo’s shares rose 12.8% to ¥22,860 in Tokyo on Tuesday, taking total gains in the past three days to 53%.
It means the market value of the company has jumped by £7bn since the latest version of its 21-year-old game was made available on 7 July.
Pokémon Go is the first edition of the game for mobile phones and and lets players face the monsters in the real world using their smartphone cameras.
Related: Nintendo shares up 53% as investors try to catch ‘em all
9.09am BST
09:09
Figures published overnight showed consumer spending slowed to recession levels in the run up to the EU referendum.
High street and online sales were up 0.2% in June compared with the same month a year earlier according to the survey from the British Retail Consortium and KPMG.
But sales were down 0.5% on a like-for-like basis, which strips out the impact of sales at shops open for less than a year.
Over the second quarter, sales were up 0.5% on the first quarter and 1.2% up on an annual basis.
The BRC said this was the weakest performance since May 2009, when the economy was contracting during its longest and deepest postwar recessions.
Economists have commented that consumers are likely to delay spending on big items while economic uncertainty reigns following the Brexit decision.
Related: Consumer spending slowed to recession levels before EU referendum
Updated
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at 9.11am BST
at 10.31am BST
8.57am BST
10.25am BST
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10:25
Meanwhile the yen hit more than a two-week low against the dollar as investors factored in more monetary stimulus following the the election victory by Japan’s ruling coalition.
David Kohn, an external member of the Bank’s Financial Policy Committee, says the committee were in agreement on Brexit risks, and that there was no pressure on policymaker to take one view or another.
The dollar rose 0.8% to 103.64 yen, its strongest since 24 June when the Brexit vote was revealed.
We looked at the potential risks that might emerge from a leave vote. All of us agreed it was the biggest near term risk to financial stability
8.49am BST
The statement we put out at the end of March was a consensus opinion.
08:49
10.20am BST
Pound rises above $1.31
10:20
The pound is rising this morning, currently up 1% against the dollar at $1.3130.
Tyrie says he wants to address the allegation in the run-up to the referendum that the Bank attempted to scare voters about Brexit for political motives.
As it stands, the pound is on track for its biggest one-day gain since before the EU referendum.
Tyrie runs through the allegations, made by various politicians on the Leave side of the campaign. They claimed the governor was working in the interests of David Cameron and George Osborne, calling into question the independence of the Bank of England.
Sterling is also up 0.6% against the euro at €1.1813.
Tyrie:
8.40am BST
That’s a very serious allegation.
08:40
10.16am BST
European markets open slightly higher
10:16
Markets have edged higher in early trading, following the FTSE 100’s move into a bull market on Monday.
Andrew Tyrie, chairman of the Treasury Committee, makes the point that this is a significant moment, as it is the first opportunity for MP’s to quiz the governor since the Brexit vote.
The FTSE 100 is trailing however, down four points.
10.15am BST
Investors have found comfort from the sooner-than-expected end to the Conservative Party leadership contest. Theresa May’s confirmation as the next Prime Minister removes the uncertainty that investors were expecting to run for another couple of month.
10:15
May is expected to move into Number 10 on Wednesday, when firm plans for Brexit and life outside the EU can get underway.
Here we go. The governor and Bank colleagues take their seats.
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10.14am BST
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The agenda: Mark Carney updates on Brexit fallout
The Treasury Committee is late starting, we will be bringing you updates once it’s underway...
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
10.11am BST
The Bank of England is in focus this morning. At 9.30am the Bank will publish the minutes of the Financial Policy Committee meeting held on 28 July and 1 July.
10:11
Then at 10am the Bank’s governor Mark Carney will be questioned by MPs on the Treasury Select Committee about the Financial Stability Report published by the Bank last week.
The full story on the FPC minutes from the Guardian’s Jill Treanor:
Here is our story on the report:
Related: Bank of England was warned about Brexit property fund problems
Related: Bank of England releases £150bn of lending amid warnings on stability
10.07am BST
Today’s session will give Carney the opportunity to provide his latest view on the fallout from the Brexit vote, in this fast-changing environment. You can watch it live here.
10:07
Also coming up...
Quick note before the governor starts...
Related: FTSE enters bull market as May rival quits and Wall Street surges
This from Jasper Lawler of CMC Markets on the relief among investors...
The confirmation of a new UK Prime Minister has offered some welcome certainty in uncertain times. Theresa May as PM has produced no Mayday calls in markets.
The “safe hands” of Mrs May at the helm has actually reduced distress signals. The pound has risen over 1% against the dollar today, adding to yesterday’s gains when Andrea Leadsom ended her campaign to become the Tory party leader.
The certainty of Theresa May stepping into the top job in UK politics ahead of schedule has had the perhaps unintuitive effect of weighing on UK stocks.
It was the drop in sterling that cushioned the ‘Brexit blow’ because of its positive effect on UK company foreign earnings. Subsequently, the rebound in the pound is weighing on the FTSE 100, notably the big multinationals including Vodafone, GlaxoSmithKline and Diageo.
