BOE’s Carney: Rate cut will reach through the financial system

Talking to LBC Radio on Friday, BOE Governor Mark Carney sounded confident that the central bank’s rate cut decision will eventually reach out to the economy.

Key Quotes:

"It's not radical, it's appropriate for the situation we're in right now which is there is more uncertainty because of the decision to leave the European Union.”

"It's going be a period of adjustment but an adjustment to big opportunities and our job is to help with that adjustment, to help smooth it.”

"So we're providing the stimulus the economy needs today for the future. We have flexibility to do more if we need to. We could lower rates further if we needed to. But we're only going to do it if that's appropriate.”

"This is a big package but it's a smart package, a package that works together, that's more than the sum of its parts. Crucially it's a package that reaches through the financial system.

"What we didn't want to do was to do a bunch of things that rattle around the Square Mile and the City of London and don't make a difference to someone who's going to get a mortgage or someone who's got a viable idea for a new business during this period of adjustment."

"What we've seen in other countries is, to be honest, they've got this a bit wrong. They have adjusted interest rates, they've dropped them, but the banks in some jurisdictions have raised borrowing rates for mortgages.”

"We're actually the regulator of all those banks and building societies, so we understand some of the dynamics when rates are very low and we've designed alongside the rate cuts a facility the sole purpose of which is to make sure those records get passed through to mortgagers and to new businesses."