'I think he felt he had to intervene and do something', says journalist Alex Brummer on Mark Carney's press conference

'I think he felt he had to intervene and do something', says journalist Alex Brummer on Mark Carney's press conference

Bank of England governor Mark Carney is expected to cut interest rates

Thursday, June 30, 2016

Mark Carney held a press conference today, and economics commentator Alex Brummer explained that the Bank of England governor "felt he had to do it."

Interest rates are likely to be cut soon to deal with the impact of Brexit, giving strong indications that markets have changed due to the vote.

"What he made clear was, we are without economic management at present, because of the political uncertainty and the political earthquake going on in Westminster," journalist Brummer told Sam Delaney. "Someone has to step into the breach and make sure the economy doesn't go down the plug hole.

"We found this during the financial crisis – the only people who could act save the economy were central bankers.

"You can't stop the economy from crashing or slowing down, but you can make the pain slightly easier, I think that's what he's trying to say.

"I just think he felt he had to intervene and do something, and say 'we are standing here, we are going to make sure that businesses can get the credit to keep on doing business, consumers can still buy their cars, and the housing market doesn't freeze up' and so on."

He also suggested what Carney could do in order to help the economy.

"The first thing he can do of course is the interest rates are not very high. They're 0.5 per cent, but you can cut from 0.5 per cent to 0.25 per cent, so that’s a possibility.

"We have what we call quantity easing, which is buying in bonds of one kind or another, they can be government bonds, the bonds which the government issues to pay off its borrowings, and he can buy some of those and hold them for a period of time, and that pushes money into the economy."

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