Carney treads carefully on Brexit impact

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Mark Carney is choosing his words carefully.

The Bank of England may have trimmed its growth forecasts for the UK and warned of the beginning of a consumer slowdown, but the governor is today making sure to pick a pointedly neutral tone on the potential impact of Brexit.

Mr Carney was attacked by some Conservative MPs and Brexit supporters after the referendum, who accused him of taking sides in advance of the vote and “talking down” the economy afterward.

Speaking in his regular press conference after today’s Inflation Report, however, Mr Carney was very cautious not to offend.

Asked whether falling real incomes were a result of the Brexit vote, for example, he said the overshoot in inflation was directly caused by the vote, but stressed:

The currency went down because of a judgment – I’m not endorsing the judgment, I’m observing the judgment, the judgment of the market – that there would be consequences for the UK’s medium-term prospects.

He also said that the Bank has based its forecasts on expectations that the government will successfully agree on future trading arrangements with the EU with a smooth implementation period after negotiations, and said the Bank has not made any “alternative forecasts” of what will happen should talks be unsuccessful.

Lucy O’Carroll, chief economist at Aberdeen Asset Management, said it seemed like “Mr Carney’s main target today was not to say anything that can be overly seized upon by either side of the political spectrum during the election campaign. To that extent, it’s been a success”

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