Sunday, 21 October, 2018

Risk of no deal Brexit 'uncomfortably high', Bank of England governor admits

The Bank of England’s monetary policy committee appears almost certain to raise interest rates this week The Bank of England’s monetary policy committee appears almost certain to raise interest rates this weekYUI MOK PA
Cristina Norman | 03 August, 2018, 17:09

"GBP is trading lower on Carney "no deal" Brexit scenario it appears", says Neil Jones with Mizuho Bank Ltd. The Pound-to-Dollar exchange rate has hit a low at 1.2982 confirming fresh 2018 lows are on the cards in the near-term.

The banks have been tested to ensure they have enough capital to cope with a scenario of a 4.7% fall in UK GDP, a 33% fall in house prices, interest rates rising to 4%, unemployment rising to above 9% and the pound falling further.

"I think the possibility of a no deal is uncomfortably high at this point", Carney said in an interview with BBC radio.

The Bank of England has increased interest rates to their highest level for almost 10 years after the summer heatwave helped the economy bounce back from a snow-hit start to the year.

Mr Carney said: "We have been planning for very hard circumstances and the banks are ready".

"Parties should do all things" to avoid the United Kingdom leaving the European Union without a deal.

"Parties should do all things to avoid (a no deal Brexit)", Carney said.

After Thursday's interest rate rise, interest rates stand at 0.75%, unemployment is forecast to fall below 4% and the United Kingdom economy expected to grow faster than the 0.2% in the first quarter of the year.

But it also said inflation - now running at 2.4% - was set to rise slightly higher than it had predicted in May's set of forecasts after recent falls in the value of the pound and higher energy prices.

However, the financial system was robust and could withstand shocks.

Carney said consumer prices would likely rise in the case of a no-deal Brexit as companies enacted contingency plans to keep supply chains operating.

"The financial system will be ready", he said, so that people would not have to worry about about their money in the bank and be able to get loans.

Last night saw the Bank of England (BOE) raise its benchmark interest rates to 0.75%, the highest since the bowels of the GFC in 2009.

The BoE said Britain's economy, while growing more slowly than in the past ahead of Brexit, was operating at nearly its "speed limit", or full capacity, raising the prospect of more home-grown inflation pressure ahead.

It also fleshed out its thinking on how far it is likely to go with its planned rate hikes by publishing a new long-term forecast for what it called Britain's trend real interest rate, or "R*", of zero to 1 percent, more than 2 percentage points below its pre-financial crisis level.

"We've already done the stockpiling", he said. That compares with the long-term average of 5%.

Recommended

  • United States  to launch new initiatives to expand Indo-Pacific economic engagement

    United States to launch new initiatives to expand Indo-Pacific economic engagement

    The U.S. "will not seek dominance in the Indo-Pacific, and will oppose any country that does", he said. We want the peaceful resolution of territorial and maritime disputes.
    Iranian Officials Rebuff Trump Meeting Offer

    Iranian Officials Rebuff Trump Meeting Offer

    Secretary Pompeo and National Security Advisor John Bolton, in contrast, seem more interested in forcing Iran to capitulate. Iran is less isolated than North Korea and less amenable to a media spectacle that doesn't restore the benefits Iran lost.

    Meghan Markle finds support in Kate Middleton over issue with dad

    Why? He returned home on the Monday after the wedding and was pictured purchasing a creamy drink from Starbucks en route. Yikes! What a royal diss - but she should probably spell Chrissy's name correctly if she expects her to ever see it.
  • At least 3 killed in Zimbabwe post-election violence

    At least 3 killed in Zimbabwe post-election violence

    Members of the Movement for Democratic Change (MDC) party are claiming that the elections have been rigged. Vote counting began at polling stations across the country after polls closed Monday evening.
    North Korea only returned one dog tag to identify war remains

    North Korea only returned one dog tag to identify war remains

    U.S. spy satellites have detected renewed activity at a North Korean nuclear missile factory, according to a senior U.S. official. Indeed, the commitments regarding its nuclear weapons program were so vague as to be nearly meaningless, in my view.
    Woman Killed Alongside Her Great-Grandchildren in California Wildfire

    Woman Killed Alongside Her Great-Grandchildren in California Wildfire

    Officers have gone to homes of several people reported missing and found that cars were gone - a strong indication they fled. Government officials claimed that it is the largest fire in California, which is threatening more than 5,000 structures.
  • Chandigarh Police asks youngsters to desist from Kiki challenge

    Chandigarh Police asks youngsters to desist from Kiki challenge

    The internets have been going nuts ever since comedian Shiggy gave the song new life via the "The Shiggy Dance Challenge". With a wag of her tail, 7-year-old Supra shows off her dance moves to the song by scooting alongside a driving vehicle .
    Tesla steadies output of new Model 3 sedan, sees a profit

    Tesla steadies output of new Model 3 sedan, sees a profit

    Tesla says it lost almost $743 million between April and June this year, compared with about $785 million last quarter. The company ended the quarter with $2.8 billion in cash, compared with $3.5 billion in the prior quarter.
    Zimbabwe election: ZANU-PF wins parliamentary majority, electoral body says

    Zimbabwe election: ZANU-PF wins parliamentary majority, electoral body says

    The ZANU-PF leader tweeted: "At this crucial time, I call on everyone to desist from provocative declarations and statements". The commission said it would delay releasing any results of the presidential race until all the votes are collated.
  • Screenshots: Did Urban lie about knowledge of coach's abuse?

    Screenshots: Did Urban lie about knowledge of coach's abuse?

    Football practice starts on Friday, with offensive coordinator Ryan Day serving as the interim coach. Smith obtained a restraining order shortly after the incident but charges were never filed.
    Demi Lovato recovering with family and 'trusted' friends - like Wilmer Valderrama

    Demi Lovato recovering with family and 'trusted' friends - like Wilmer Valderrama

    The report noted that Demi, who recently fired her sober coach , tried to hide her partying, acting like everything was fine. Whilst the singer had been on the road to a fully recovery, she suffered from a high fever and nausea over the weekend.
    Muto set to make move to Newcastle

    Muto set to make move to Newcastle

    He then went on to play 24 times for Newcastle during last season, helping the side to a 10th-place finish. Aleksandar Mitrovic has left Newcastle's pre-season trip to Portugal after a fee was agreed with Fulham .

Dragon Ready for Return Ahead of Commercial Crew Announcement Dragon Ready for Return Ahead of Commercial Crew Announcement In March, astronaut Eric Boe visited Space Launch Complex 41 (SLC-41) at Cape Canaveral Air Force Station in Florida. SpaceXNASA astronaut Sunita "Suni" Williams tests mock-ups of SpaceX's Crew Dragon spaceship and spacesuit.

Still a way to go on North Korea: Pompeo Still a way to go on North Korea: Pompeo The remains will immediately be subjected to DNA testing to see if they match DNA in the DPAA's database. USA officials say they have already contacted the family of a service member whose dog tag was returned.

Trump says Koch brothers are ‘a total joke’ in GOP Trump says Koch brothers are ‘a total joke’ in GOP This isn't the first time the Koch brothers have disagreed with Trump-in fact, they didn't financially back his 2016 campaign . But trade - and Trump's aggressive actions on tariffs - remain a sticking point for some of the Koch stalwarts.

NASA Says Life On Mars Is Currently Impossible NASA Says Life On Mars Is Currently Impossible The teams still have plenty of time to ideal their designs: it could be decades before a manned mission to Mars takes place. ET today, don't worry; it will remain pretty close, providing great viewing opportunities until about the end of August.

Satellite Images Suggest North Korea Is Up To Something Once Again Satellite Images Suggest North Korea Is Up To Something Once Again The report casts further doubt on President Donald Trump's claims of victory last month in disarmament talks with North Korea. U.S. officials have not said if Pompeo will meet his North Korean counterpart, Ri Yong-ho, on the sidelines of the forum.

Last-Minute Signings Jose Mourinho MUST Make Last-Minute Signings Jose Mourinho MUST Make United travel to Germany for their final pre-season game against Bayern Munich at the Allianz Arena on Sunday. Jose Mourinho wants two more signings before the transfer deadline - but is only confident of getting one.

Trump willing to shut down government over wall Trump willing to shut down government over wall And that will likely mean far less funding for Trump's proposed border wall than he initially sought, analysts said . Attorney General Jeff Sessions and DHS' Nielsen implemented the policy in earnest in May. "We'd get blamed", Sen.

Trump echoes Giuliani defense: 'Collusion is not a crime' Trump echoes Giuliani defense: 'Collusion is not a crime' Stephen Colbert kicked off Tuesday's Late Show with the trial of Paul Manafort , President Trump's former campaign chairman. Giuliani was dismissing these allegations when he argued that collusion can't be criminal.

Dozens expected to testify against Paul Manafort But Asonye told jurors the evidence would show Manafort hid "tens of millions of overseas income" to avoid paying taxes. Rudy Giuliani, a lawyer for Trump, said no one facing trial should expect a pardon, but he did not rule one out.

Police say 3 killed, 7 injured; 2 suspects Police say 3 killed, 7 injured; 2 suspects Police say three people have died and seven other people have been transported to local hospitals with gunshot wounds. New Orleans Police were still on the hunt for the suspected shooters on Sunday morning.

Deadly 6.4-magnitude quake hits tourist island near Bali Deadly 6.4-magnitude quake  hits tourist island near Bali Nugroho said that the foreign visitors come from the U.S., UK, Malaysia, Canada, France, Netherlands, Thailand and Singapore. However, they are unlikely to reach the base before nightfall, and the evacuation will most likely stretch into Tuesday.

Facebook sued after stock plunge 'shocked' market Facebook sued after stock plunge 'shocked' market He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants. Shareholders suddenly turned tail after realizing that growth had been running out of the company's core money-making app.

MH370 families are 'none the wiser' after 495-page report is released MH370 families are 'none the wiser' after 495-page report is released The Boeing 777 jet vanished in March 2014 with 239 people - mostly from China - on board, en route from Kuala Lumpur to Beijing. Since then the cause of one of the world's greatest aviation mysteries has never been solved.

Russia Investigation: Giuliani Says He’s Not Sure Collusion Is a Crime Russia Investigation: Giuliani Says He’s Not Sure Collusion Is a Crime Giuliani is trying to invent, it says 'cash, ' and Michael Cohen says 'no, no, no'". As recently as May, Giuliani called Cohen "an honest, honorable lawyer".

India effectively strips four million of citizenship in Assam India effectively strips four million of citizenship in Assam Hundreds of thousands of people fled to India during Bangladesh's war of independence from Pakistan in the early 1970s. The draft presented by the officials had recognised 2,89,83,677 locals as the citizen of India.