Mark Carney: Interest rates may be cut

Bank of England Governor Mark Carney has hinted that further cuts in interest rates and other measures will be needed in the wake of the EU Referendum. Ryan Fowler reports

Mark Carney: Interest rates may be cut

In his first speech following his initial response to the Brexit vote last week, Mark Carney said he has a number of options to stabilise the economy,

Carney said he was confident in the UK’s ability to successfully adapt to a future outside the European Union but warned that growth will slow in the interim.

On the topic of a rate rise he said: “In my view, and I am not pre-judging the views of the other independent MPC [Monetary Policy Committee] members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer.

“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.”

However he warned that cutting the interest rate below zero could “perversely” reduce the availability of credit.

Interest rates have been at 0.5% for more than seven years after they were slashed during the global financial crisis.

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