Highlights of the BOE Carney’s press conference
- The MPC is tolerating higher inflation in order to reach higher employment.
- The degree of the current monetary policy accommodation is appropriate; if additional stimulus needed, the BOE wouldn't hesitate to introduce it.
- Pound’s exchange rate declines because of the judgment the market players make about the real economy, not the UK monetary policy. The BOE can't influence the market’s perception of the UK Brexit prospects, but it is able to control inflation.
- The Court’s ruling on article 50 is an example of uncertainty on Brexit which bears down on business investments (their outlook of the UK economy is less sanguine). The lack of investment could lead to the decrease in supply. The demand is solid at the present time, whereas the BOE can't say the same about the supply (any decreases in supply could lead to increases in the inflation rate).
- It's too soon to reach a firm judgment about what type of Brexit the UK will have.