The Bank of England is taking it for granted that we’ll see an orderly Brexit. Investors aren’t as confident.
While Governor Mark Carney said the U.K. central bank may have to raise rates sooner than markets are expecting, he also said that’s based on new forecasts that presume a “smooth” adjustment to the new relationship with the European Union. Traders questioned the likelihood of such an outlook, and sent the pound down.
Carney’s relatively upbeat forecasts contrast to last year, when his prediction that growth would take a hit if Britain voted to leave the EU didn’t pan out. He came under fire from pro-Brexit campaigners for his pessimism. As a rule, the BOE incorporates government policy into its forecasts as it’s stated, and didn’t model the possibility of a disorderly Brexit.
CAC Quiet as French Nonfarm Payrolls Beats Estimate
Gold Follows Copper and Oil Higher
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Craig Erlam
Latest posts by Craig Erlam (see all)
- Markets in risk averse mode after tariffs - 06/18/2018
- OANDA Market Insights podcast with Jazz FM - 06/15/2018
- Markets pressured ahead of tariff announcement - 06/15/2018