Bank of England governor Mark Carney upbeat on UK growth

0

Bank of England governor Mark Carney.
EPA

The Bank of England governor has said he now has more confidence in the UK economy, in a speech which could stoke expectations of an interest rate rise in August.

Mark Carney said recent data had given him “greater confidence” that weak first-quarter growth “was largely due to the weather”.

He said household spending and sentiment had “bounced back strongly”.

However, he also warned that a global trade war could dampen economic growth.

  • Global economy ‘under threat as tariff war bites’
  • What would a rate rise mean for you?

In a speech at the Northern Powerhouse Summit in Newcastle, Mr Carney said: “Overall, recent domestic data suggest the economy is evolving largely in line with the May Inflation Report projections, which see demand growing at rates slightly above those of supply and domestic cost pressures building.”

The pound edged up 0.1% against the dollar to $1.3246 following his remarks.

Last month, three members of the Bank of England’s Monetary Policy Committee – including chief economist Andy Haldane – voted in favour of lifting the interest rate to 0.75%.

Mr Carney was among the six MPC members voting to keep rates on hold at 0.50%.

.
AFP

.

The US will implement a 25% import tariff on a list of Chinese products on Friday.

In his speech, Mr Carney also warned that “protectionist rhetoric” was rising and “is now turning into action, with the US increasing tariffs and the affected countries retaliating”.

He said: “There are some, tentative signs that this more hostile and uncertain trading environment may be dampening activity.”

Mr Carney cited evidence from the IHS Markit/CIPS purchasing managers’ index (PMI), which suggested that global export orders and manufacturing output have fallen back from highs at the start of the year.

On Friday, the US will implement a 25% import tariff on a list of hundreds of Chinese goods. On the same day, China will also impose 25% tariffs on a range of US goods, including pork products, fish and rice.

LEAVE A REPLY