LONDON (Reuters) – Bank of England Governor Mark Carney mentioned Britain’s financial system may begin to develop extra rapidly and cease lagging behind the global financial system later this yr if there’s readability about Britain’s future relationship with the European Union.
“The world economy is accelerating, and we haven’t seen that yet,” Carney advised BBC radio in an interview on Friday.
“There is the prospect this year, as there is greater clarity about the relationship with Europe and subsequently with the rest of the word, for a recoupling – if I can use that term borrowed from Gwyneth Paltrow – a conscious recoupling of the UK economy with the global economy.”
Britain grew extra slowly than each different G7 nation over the primary three quarters of 2017 after the 2016 Brexit vote.
Official information due in a while Friday is anticipated to indicate development remained unchanged within the fourth quarter.
Most economists anticipate the BoE will elevate rates of interest in direction of finish of 2018, however some suppose it may transfer as quickly as May. The central financial institution raised charges for the primary time in additional than a decade in November because it noticed indicators that wages would rise extra rapidly after falling behind inflation.
Carney advised the BBC that Brexit had value Britain’s financial system tens of billions of kilos in decrease financial development and firms had scaled again on their funding as they waited for extra readability on what Brexit means for them.
“Investment in advanced economies is growing at double-digit rates, and it is low single digits here,” he mentioned.
Carney mentioned he wouldn’t present up to date forecasts for Britain’s financial system forward of the BoE’s quarterly inflation report which is because of be revealed on Feb. eight.
Reporting by David Milliken; Writing by William Schomberg; enhancing by Ralph Boulton