Carney says politics not a factor for his Bank of England future
Reuters
Published Oct 25, 2016 12:03PM ET
Carney says politics not a factor for his Bank of England future
By David Milliken and William Schomberg
LONDON (Reuters) - Bank of England Governor Mark Carney said on Tuesday that he would not be swayed by political issues as he weighs up whether to extend his stay at the British central bank beyond his scheduled departure in 2018.
Carney also played down recent criticism by Prime Minister Theresa May of the "bad side-effects" of low interest rates.
"I want to find some time to reflect on it," Carney told members of the House of Lords, the upper house of Britain's parliament, when asked about the factors that he was taking into account as he weighed up how long to stay at the BoE.
Carney, a Canadian, is due to say before the end of the year whether he will take up an option to stay at the BoE until 2021.
"It is entirely personal, and no one should read anything into that decision in terms of government policy, actual, imagined, potential, past, etc.," he said. "This is a role that requires total attention, devotion, and I intend to give it for as long as I can. But those are the only factors."
May raised questions about possible political interference at the BoE when she said earlier this month that low interest rates in Britain had hurt savers.
Carney has since come in for criticism from other members of the ruling Conservative Party, most recently Michael Gove, a defeated party leadership contender, who said on Friday that Carney was so sensitive to criticism that he reminded him of emperors in medieval China who had challengers flayed alive.
Speaking on Tuesday, Carney said he did not think May was proposing a change in the way monetary policy is set.
But he also said investors would demand a higher return for holding British assets, including government bonds, if the central bank's independence was called into question.
Asked about the fall in the value of the pound since British voters decided to leave the European Union in June, Carney said it had been "fairly substantial" and the central bank's interest-rate setters would take it into account.
He said the most recent fall came after comments made by May who said on Oct. 2 that she would start formal Brexit talks, spelt out by Article 50 of the EU's treaty, by the end of March of next year.
She also caused investors to think that she would pursue a tough approach to the upcoming Brexit negotiations which could leave Britain with a lot less access to markets in the European Union once it leaves the bloc
"Sterling starts to really move as it becomes clearer the timing of the Article 50 triggering, and the market's perception - and I really underscore it's the market's perception - of what the potential relationship will be between the United Kingdom and Europe," Carney said.
Get The News You Want
He said "that perception may well be mistaken" and the BoE had to judge how long sterling weakness was likely to last as the central bank tried to work out its implications for inflation.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.