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The Latest: UK rates could rise in case of no deal Brexit

LONDON (AP) — The Latest on the Bank of England’s interest rate announcement (all times local):

1:10 p.m.

Bank of England Governor Mark Carney says U.K. interest rates may have to rise even if the country faces a potential recession after crashing out of the European Union without a deal in March.

Speaking at a press briefing after the bank kept its main interest rate on hold at 0.75 percent, Carney said “there are scenarios where policy would have to be tightened” in the event the country leaves the EU without a deal and without a transition to new trading arrangements. In that event, Britain would have to do business with the EU under World Trade Organization rules, which would mean tariffs slapped on British exports.

Though he said this is “not the most likely scenario,” Carney said policymakers would have to weigh the impact of a disruptive Brexit on such things as the pound and inflation. The bank’s primary mission, he noted, is ensuring stable inflation.

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12:50 p.m.

Bank of England Governor Mark Carney says British households and businesses are responding in different ways to the uncertainty surrounding Brexit.

With Britain just months away from leaving the European Union, Carney said households are “more sanguine” while businesses are “more wary.” As a result, he said there will likely be “short-term volatility” in the economic data.

At a press briefing after the bank kept its main interest rate on hold at 0.75 percent, Carney said household consumption appears to be stronger than expected and that is partly due to rising pay.

British households, he said, “remain resilient to a Brexit that has not yet happened.”

Businesses, by contrast, are being more cautious and investment levels are weaker than anticipated, with companies “understandably postponing investment until they have greater clarity” over Brexit.

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12:00 p.m.

The Bank of England has kept its key interest rate on hold as it waits for the outcome of the stalled Brexit discussions between Britain and the European Union.

The bank said its Monetary Policy Committee voted unanimously on Thursday to leave its main interest rate at 0.75 percent. Governor Mark Carney will later hold a news conference at which Britain’s exit from the EU is likely to be discussed as a key factor in the outlook for the economy.

Carney said this summer that the prospect of a “no deal Brexit” had gotten “uncomfortably high.” He hasn’t given his updated view since October’s summit of EU leaders failed to yield a breakthrough in the Brexit talks.

He and the British government have separately said that failure to agree on a deal will have an array of negative consequences for the British economy.

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5:00 a.m.

The Bank of England is expected to keep interest rates on hold Thursday, with investors likely to focus on what Governor Mark Carney says about the state of the Brexit negotiations.

After the decision on the bank’s main interest rate, which is currently at 0.75 percent, Carney will hold a news conference at which Britain’s exit from the European Union is likely to loom large.

During the summer, Carney said the prospect of a “no deal Brexit” had gotten “uncomfortably high.”

Carney hasn’t given his updated view since October’s summit of EU leaders failed to yield a breakthrough in the Brexit talks.

He and the British government have separately said that failure to agree on a deal will have an array of negative consequences for the British economy.

Copyright © 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.



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