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BoE's Carney suggests interest rate hikes not guaranteed in smooth Brexit


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BoE's Carney suggests interest rate hikes not guaranteed in smooth Brexit

Bank of England Governor Mark Carney said an orderly departure by the U.K. from the European Union does not necessarily mean that the central bank would resume lifting interest rates.

"I'm not going to pre-commit, there is a lot of contingencies there," Carney said in an interview with Bloomberg News on. Oct 18, noting that global economic growth would be taken into account in the central bank's monetary policy decisions.

Carney made the statement a day after the U.K. and EU struck a revised withdrawal agreement, which is due to be voted on at the U.K. Parliament Oct. 19.

Carney said the BoE would react in a "normal time frame" if the U.K. crashes out of the EU without a deal. He added that policymakers are not divided on the overall strategy for a no-deal Brexit.

BoE Deputy Governor Dave Ramsden said a day earlier that a smooth Brexit would result in rate hike debates among policymakers. He said the central bank's guidance that "limited and gradual" rate increases would be appropriate following an orderly departure remains valid.

The BOE will announce its next monetary policy decision on Nov. 7, a week after the Oct. 31 Brexit date.

The U.K. government is required to ask the EU by Oct. 19 to extend the Brexit date to Jan. 31, 2020, unless Parliament approves the withdrawal agreement or agrees to a no-deal exit.