Mark Carney indicates interest rates may have to rise to dampen down inflation
Governor of the Bank of England, Mark Carney, has signalled in his speech at the International Monetary Fund’s headquarters in Washington yesterday that interest rates may have to rise in coming months to dampen down inflation.
In the speech, the Governor considers the impact of globalisation on inflation. He draws on the example of Brexit to illustrate how global factors can influence domestic inflation dynamics and the ability of central banks to achieve price stability.
In talking about Brexit he indicated it would cause inflation to rise and have a worsening effect the longer it takes to secure new trade deals.
He said “Any prospective increases in Bank Rate would be expected to be at a gradual pace and to a limited extent, and to be consistent with monetary policy continuing to provide substantial support to the economy.”
Read the speech in full click here.