Bank of England governor Mark Carney pledges £150BILLION to banks as pound reaches new low
Risks posed by leaving EU are 'starting to crystalise' he says
BANK of England governor Mark Carney yesterday promised another £150billion to banks — as the Pound reached a new low.
He also pledged to take “whatever action is needed”, while warning the risks posed by leaving the EU are “starting to crystalise”.
His comments came as the Pound dropped below 1.31 US dollars for the first time since 1985 and sank to its weakest level against the euro, at 1.17, since 2013.
Sterling’s latest slide followed worse than expected figures for our services sector in June. It was also hit after insurer Aviva suspended trading in its £1.8billion property fund.
Mr Carney said: “The Bank has a clear plan. We are rapidly putting its main elements in place. And it is working.”
But he also warned huge piles of consumer debt will leave Brits vulnerable if there is a downturn.
The Bank has a clear plan. We are rapidly putting its main elements in place. And it is working
Mark Carney
In response to the uncertainty, the Bank will reduce the capital required to be held on lenders’ balance sheets by £5.7billion, allowing them to lend up to £150billion more.
Mr Carney also raised the possibility of more quantitative easing, having already pledged £250billion after the Brexit vote.
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George Osborne hailed the move after meeting banks to discuss the Brexit fallout.
The Chancellor said: “While we are realistic about the economic challenge, we are reassured that collectively we can rise to it.”
Some economists forecast the Bank will cut its interest rate from 0.5 to 0.25 per cent next week.