Summary of Governor Mark Carney comments at Inflation report parliamentary hearing

The Bank of England governor Mark Carney said during the Treasury Select Committee’s February Inflation Report on February 26:

• Given the exceptional circumstances of Brexit, I would expect the Monetary Policy Committee (MPC) to provide whatever monetary support it can consistent with the price stability remit.
• In no-deal Brexit scenarios, MPC’s tolerance for sustained overshoot of inflation target could be breached and some tightening would be required.
• We are possibly entering a period of de-globalization that will bring an inflationary bias.
• A no-deal, no-transition Brexit would be an extreme example of this.
• We are not seeing any liquidity stresses in the market.
• Usage of BOE liquidity facilities around 9 bln Sterling, below levels at the time of 2016 referendum.
• We stand ready to provide liquidity in all major currencies.
• The current outlook is clouded by uncertainty around the UK’s economic relationship with the EU.
• Judging the appropriate stance of monetary policy requires focusing on the more persistent factors affecting inflation.
• Economic conditions evolve in line with our projections, limited and gradual rate rises are likely to be needed.
• Monetary Policy Committee has made clear that the response of monetary policy to Brexit is not automatic and could be in either direction.
• We will provide all the stimulus we can after no-deal Brexit, subject to delivering price stability.