— Angus Dent, ArchOver
The Bank of England Governor Mark Carney held a press conference about the Financial Stability Report in London on Tuesday. Carney said that the Financial Policy Committee would increase the countercyclical capital buffer rate to 0.5% from 0%. Apart from that, the FPC expects to raise the rate to 1% at its November meeting. The Bank acknowledged the UK'[s economic performance had been markedly stronger than its gloomy predictions. However, the BoE noted that risk levels had been varying from sector to sector and remained quite high in the consumer credit market. Carney said that consumers should carefully identify the rationale for purchasing property or investing in a business. Starting from July, the BoE will start tightening rules on unsecured lending in order to slow lending growth among people who are unable to meet loan obligations. Furthermore, the Bank pointed to the high private-sector borrowing in China, which can potentially cause problems to British banks. Policymakers cited the country's exit from the EU as a risk to the economy, adding that the Bank was preparing for all scenarios post-Brexit.
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