Carney And May Take To The Stage At BoE Conference In Defence Of Free Markets And Brexit Plans

Brexit, the economy, free markets and BoE monetary policy are under the spotlight as Carney and May speak

The Pound was volatile Thursday after governor Mark Carney and Prime Minister Theresa May took to the stage at a Bank of England conference, placing Brexit, the economy and BoE monetary policy under the spotlight.

Carney told the audience; "monetary policy cannot prevent weaker real income growth likely to accompany Brexit...monetary policy can influence how the hit to incomes is distributed between job losses and inflation."

Governor Carney’s comments appear to suggest the Bank of England will prioritise the protection of jobs and growth over bringing down inflation, to the fullest extent possible within its mandate, underlining that any rate hikes going forward are likely to be limited and gradual.

The Pound-to-Euro rate dropped around 40 points to be quoted at 1.1350 in the half hour between 09:00 and 09:30 while the Pound-to-Dollar rate dropped 50 points to be quoted at a low of 1.3340.

Speaking at a conference celebrating two decades of Bank of England independence, former BoE employee and current Prime Minister Theresa May mounted a defence of free markets just one day after the opposition Labour Party called for her to step down and make way for a radically different policy agenda that opposition leader Jeremy Corbyn says is now mainstream.

Taking a veiled swipe at the opposition, May told the audience that those who oppose free markets, in favour of far-left and socialist ideas, are advocating policies that have been shown to have failed - citing countries like Venezuela as examples of what Britain might face if the opposition finds its way into Number 10 Downing Street.

Appearing at ease with the subject matter and audience in a way often lacking in her speeches, May won applause for her reiteration and defence of Brexit plans set out in Florence last week, and further advocated in favour of the fiscal responsibility that has been at the heart of the Conservative Party agenda throughout its time in parliament.

Sterling stabilised in the aftermath of May’s speech, with GBP/USD trading back up to 1.3362 in an attempt to pare losses, while the Pound-to-Euro rate traded back up to 1.1358.

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