Belfast Telegraph

UK Website Of The Year

Pound boosted as Carney suggests market may be wrong

By Kalyeena Makortoff

Published 26/10/2016

Testimony: governor Mark Carney
Testimony: governor Mark Carney

Sterling has staged a mini-recovery after the Bank of England governor suggested that market reaction to Brexit could be "mistaken".

Mark Carney said that while the pound was "going to move around" throughout the Brexit process, the market may misinterpret Britain's economic prospects as it disentangles itself from the EU. He said that the slide in the pound over the past few weeks has largely been driven by "market perception of fundamental factors" and "what the potential relationship will be between the UK and Europe".

"The initial market perception of where the supply potential of this economy will be in the immediate aftermath (of Brexit), that perception may well be mistaken," Mr Carney said during his appearance in front of the House of Lords Economic Affairs Committee yesterday.

His comments helped the pound recover losses, after falling as much as 1% to 1.2 against the US dollar. Sterling was trading lower by 0.46% at around 1.216 dollars as Mr Carney continued his testimony.

He also said the exchange rate has been most drastically affected by government announcements, rather than the Bank's monetary policy, adding that sterling barely moved after the Bank delivered a bumper stimulus package that included cutting interest rates to record lows of 0.25% in August.

Mr Carney said sterling really started to move after it became clear when Article 50 would be triggered, and after the Conservative Party conference.

Belfast Telegraph

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Read More

From Belfast Telegraph