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BREAKING: Mark Carney hints at interest rate CUT after Brexit vote

Economy:
BREAKING: Mark Carney hints at interest rate CUT after Brexit vote

BANK of England Governor Mark Carney today moved to reassure financial markets of Britain's economic stability in the wake of the vote to leave the European Union (EU).

Britain can deal with the change of leaving the bloc and the Bank has a plan to deal with any uncertainty thrown up by the exit, said the chief.

He hinted that part of the Bank's response could be to cut interest rates in the summer.

The Bank's base rate has been at 0.5 per cent since March 2009 it's now expected to be cut to 025 per cent in the coming months.

However, the Governor said plans to deal with current market uncertainty are already working well.

It comes as the FTSE 100 has fully recovered after initially dropping off the back of the referendum result.

And Mr Carney's comments helped push the index to its highest level since last summer.

Mr Carney said: "The result of the referendum is clear. Its full implications for the economy are not.

" The UK can handle change. It has one of the most flexible economies in the world and benefits from a deep reservoir of human capital, world-class infrastructure and the rule of law.

"Its people are admired the world over for their strength under adversity.

" The question is not whether the UK will adjust but rather how quickly and how well. "

The Governor pointed out that a lower pound is likely to boost exports for businesses, but said that he believed there was a threat to the economy amid the current uncertainty.

He said: "I am not pre-judging the views of the other independent Montetary Policy Committee members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer. "

The Governor also said he believed British households could be left worse off, as the weaker pound raises prices.

. In reaction UKIP leader Nigel Farage said the Governor was "talking down Britain."

Joshua Mahony, market analyst at trading platform IG, said: "The FTSE has broken to the highest level since August 2015 today, with the UK 10 year yield hitting an alltime low after comments from Mark Carney provided a new dovish bias upon monetary policy going forward.
"This week has largely seen the FTSE disregard the fears associated with Friday's vote aside despite one of the biggest political storms seen in decades."

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30 June 2016, 18:40