LONDON, Sept 7 Bank of England Governor Mark
Carney and other members of the Monetary Policy Committee spoke
to parliament's Treasury Committee on Wednesday and delivered
annual reports including their views on the economy.
Below is a selection of their comments:
ON AUGUST RATE CUT, STIMULUS PLAN
"(I) absolutely feel comfortable with the decision I
supported and the committee took in August to supply monetary
CONTINGENCY MEASURES EFFECTIVE
"I'm quite comfortable with the analysis we did in advance,
the preparation we did in advance, the effectiveness of the
contingency measures, all of which put us in a position to help
this economy adjust and to help make, if I can bring it back to
the issue which is at the heart of the referendum, to help make
the leaving of the European Union a success as quickly as
BANK'S BREXIT STEPS VALIDATED
"I am absolutely serene about the ... judgments made both by
the MPC and the FPC, more specifically market events. Liquidity
pressures that were met because of contingency measures that we
had taken in response to the judgments of the Financial Policy
Committee absolutely validated the steps that we and other
central banks and other authorities around the world had taken."
ON BOE'S AMMUNITION
"We have tools. We are very much not out of ammunition nor
are we trigger happy. We are not looking to use tools for the
sake of using tools. We'll calibrate monetary policy as we each
individually think appropriate at the time and take those
NEW RELATIONSHIP WITH EUROPE, WORLD WILL IMPACT ASSET PRICES
"UK-focused asset prices are going to be crucially,
importantly and we all hope very much positively influenced by
the major decisions that parliament are going to take with
respect to our relationship first with Europe and then with the
rest of the world, and broader productivity and other strategies
that are catalysed by this or are associated with this".
FPC MUST GUARD AGAINST DEBT-FUELLED ASSET PRICE MOVEMENTS
"Clearly it's the responsibility of the Financial Policy
Committee not to target asset prices per se but to ensure that
the conditions associated with asset price movements are not
creating vulnerabilities, so not debt-fuelled liquidity only,
debt-fuelled movements in asset prices."
BANK'S PART IN BOUNCE-BACK
"Part of the bounce-back, of course part of it, I'm not
going to represent all of it by any stretch of the imagination,
but part of it is there's a bounce-back because the Bank took
timely, comprehensive and concrete action and that action has
had an impact."
KEEPING BOUNCE-BACK IN PERSPECTIVE
"The bounce-back (in the PMI index) right now, if you take
the sum of the data which has come in, is running a bit stronger
than that, that 0.1, that's great, that's welcome. We'll see
when we get all the data in. But broad brush is growth running
about half as much as it was prior to the referendum, that's
probably about right given what we know right now. So we
expected some bounce-back, there's been a bit more, but we're
keeping it in perspective."
MONETARY STIMULUS HAS HAD IMPACT ON RANGE OF ASSET PRICES
"The prospect and then the reality of major monetary policy
stimulus has had a notable effect on a broad range of asset
prices including domestically-focused equities.
"It is helping to stabilise residential real estate as one
of the factors because there has been quite a considerable
improvement in mortgage borrowing costs and we are seeing
pass-through of our policy actions."
CORPORATE BOND PURCHASES BY BOE
"August is the slowest month, so it's a big multiple of what
is normally a small number, but we had six times the average
issuance in August of sterling corporate issuers after we had
made this announcement so we're looking for this to have an
impact that is beyond just what we purchased but we will be very
transparent and come out, the market needs to know which
ON OUTLOOK FOR MPC
"The data still does suggest, despite some of the most
recent data being more positive than consensus expectations,
there will be a slowing in the economy so some monetary easing
does make sense, and I stand by that decision."
ON POSSIBLE FURTHER RATE CUT
"If the economy evolves as set out in the August forecast, I
would expect to vote for another cut in Bank Rate this year as
highlighted in the Minutes of the MPC's August meeting."
ON POSSIBLE USE OF HELICOPTER MONEY
FORBES - "I do not support helicopter money at this point,
but I also share Jon (Cunliffe)'s 'I would never say never'. We
never know how the world evolves, but it's hard for me to
imagine circumstances in which I would support helicopter
JAN VLIEGHE - "I'm not happy to rule anything out. What I
said before on helicopter money is that it's really if you think
through all the mechanics of it, it's a fiscal operation so
somebody at some point may decide to do it but it's not going to
be an MPC operation."
CARNEY - "I would not support helicopter money. On the MPC,
I would never support it. I am saying never."
(Reporting by Michael Holden, Sarah Young and Laura Gardner
Cuesta, editing by Estelle Shirbon and William Schomberg)