- Minouche Shafik, BoE Deputy Governor
While speaking in Britain's Parliament, BoE Governor Mark Carney said that the central bank makes no judgement on potential outcome of the UK's referendum on its EU membership, but noted moves in the Sterling since the date of the vote was announced. Carney took an opportunity to highlight that the BoE is not interested, nor intended to introduce negative interest rates.
With traders already pushing back bets on the timing of a Bank of England interest rate increase, the prospects on the UK exiting the European Union, world's largest single market, is fuelling further uncertainty. Even though the timing of the first move remains highly uncertain, the next move will likely be an increase, BoE Deputy Governor Minouche Shafik said. Shafik also noted that once the uncertainty about the internal inflationary pressures dissipate, the interest rate may increase faster than the markets expect at the moment. Shafik reiterated that significantly low inflationary pressures stem primarily from external developments such as cheap oil and the weakening of global demand. With regards to wages and their impact on inflation, Shafik said that if the labour market continues to tighten, she expects "wage growth will ultimately pick up to levels more consistent with inflation being at target.
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