- Bank of England
The British economy is expected to close its output gap within next year, Mark Carney, Bank of England Governor said, adding that recent slowdown in inflation is due to a fall in food and energy prices. Carney forecast productivity to pick up, but it would not return to historical averages any time soon.
Meanwhile, Carney might face accusations in lack of transparency, after a secret BoE's report was accidentally sent to the Guardian newspaper. The work is known as "Project Bookend", managed by Deputy Governor Jon Cunliffe, was meant to assess potential risks related British exit from the European Union. The email also included guidance for how to rebuff questions from the public. The Bank of England said it would not talk about its assessment in advance but would disclose details "at the appropriate time," adding it had taken a similar approach when it considered the implications of last year's Scottish referendum. Prime Minister David Cameron is a referendum on EU membership by the end of 2017, and the BoE's unfortunate mistake may drag Governor Mark Carney into the political debate. Yet, Cameron said he was confident he could strike a deal on EU reforms that satisfy his demands and those of the British people before holding the referendum. Still, many British business leaders are concerned about the possibility of losing access to their top export markets and there are also worries about the impact on Britain's financial services industry.
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