How Much GBP Weakness Can BoE Stomach?

The pound’s latest Brexit-fueled decline may be getting serious enough to command Mark Carney’s attention once again.Sterling’s weakening to the lowest since October 2016 in trade-weighted terms has brought the currency near the level that prompted the Bank of England governor to point out at the time that he and his colleagues weren’t “indifferent” to the exchange rate. That suggests any remarks from policy makers will now be scrutinized all the more for any reference to their thinking on its impact.

While most BOE officials have indicated they are willing to look through the initial inflationary impact of the pound’s depreciation since the EU referendum, another sustained decline may test their tolerance. Against the euro, the pound is near the weakest since 2009.

Source: Brexit-Driven Pound Drop Tests How ‘Indifferent’ Carney Can Be – Bloomberg

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