Mark Carney, the Governor of the Bank of England and his accomplices, Haldane, Broadbent and newcomer, Tenreyro have been testifying to The Treasury Committee where the testimony had been suspended and recently reinstated again after what had been perceived by markets as a positive first round for Carney & Co., supporting the pound.
- Carney & Co: Depreciation is not a good economic strategy and makes a country poorer.
- Carney & Co: It was becoming unhealthy how little volatility was in the markets.
- Carney & Co: It is healthy the correlation between bonds and equities has changed.
- Carney & Co: Pick up a volatility does not concern me in terms of the path of UK interest rates.
- Carney & Co: Greater volatility is relatively small potatoes in the broader scheme of policy.
- Broadbent: UK interest rate futures and bond yields are more sensitive to economic news, this is welcome.
Key notes :
GBP/USD: full load down on the round turn post UK ILO jobless rate/Carney & Co
"Carney & Co, (Haldane, Broadbent and newcomer, Tenreyro), who have been testifying to the TSC facing questions on not just interest rates, but wages and jobs growth given today's less than impressive data. So far, Haldane said that it is more likely that the UK will see a pickup in wage growth. Carney has not committed to a path of interest rates to the TSC, while his team are pointing to firming inflationary pressures and committing to a more hawkish view as the world economy and the UK is looking stronger, although saying that BOE rate hikes would be gradual and limited. Carney has said the biggest uncertainty is still Brexit and that uncertainty is weighing on business investment. Carney also said that we are probably at the peak point of impact of weaker sterling on inflation. The testimony was suspended at this point and the pound got a lift from what was digested by traders as a more upbeat assessment of the outlook for the UK economy from the officials."
About BoE's Mark Carney and The Treasury Committee
Mark Carney is Governor of the Bank of England and Chairman of the Monetary Policy Committee, Financial Policy Committee and the Board of the Prudential Regulation Authority. His appointment as Governor was approved by Her Majesty the Queen on 26 November 2012. The Governor joined the Bank on 1 July 2013.
The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration and policy of HM Treasury, HM Revenue & Customs, and associated public bodies, including the Bank of England and the Financial Services Authority.
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