Bank of England boss Mark Carney in post-Brexit u-turn as gloomy forecast for economy proves to be wrong
Bank of England raised prediction for GDP expansion to 1.4% from 0.8% as UK goes from strength to strength since June 23
BANK of England boss Mark Carney has admitted his fears for the economy after Brexit were wrong.
He tore up previous dire forecasts and predicted growth is likely to double next year.
Interest rates were also held at their historic low of 0.25 per cent yesterday.
The Bank now expects to see growth of 1.4 per cent in 2017, up from the 0.8 per cent predicted in August.
This represents the biggest upgrade ever in its forecasts.
Governor Carney said: “For households, the signs of an economic slowdown are notable by their absence.
“Perceptions of job security remain strong. Wages are growing at the same modest pace as the start of the year. Credit is available and competitive. Confidence is solid.”
The decision to hold interest rates was unanimous among the Bank’s nine-member panel.
It came as the Pound surged to a near month-high against the dollar after a court ruling that the Government cannot trigger Brexit without Parliament’s involvement.
Recent figures show the economy grew by 0.5 per cent between July and September, despite many predicting a downturn following the vote to leave the EU.
But the Bank has cut its 2018 growth forecast from 1.8 per cent to 1.5 per cent and expects inflation to hit 2.7 per cent next year, up from the current rate of 1 per cent.
Mr Carney, who this week said he would stay in the job until 2019, warned Brexit would still bring uncertainty.
But he no longer expects spending on housing to fall next year. The Bank also expects exports to rise.
