Bank of England to Raise Economic Forecast for Britain

Mark Carney, Governor of the Back of England (BoE) looks set to raise the economic forecast of Britain stating that some of the risks posed by the Brexit vote had receded.

Speaking at Treasury select committee Carney said the actions the (BoE) had taken had avoided a market meltdown.  They now planned to raise the forecast for a second time.

He pointed out a transition deal was needed to quit the EU and that it posed a greater threat to the EU than Britain.

With its latest report on the economy due next month, it will build in the better than expected performance at the end of last year.

Carney said, “I would say, and I’ll say this very lightly, which is that recent data would be consistent with some further upgrade of the forecast but that process has not yet started.”

The BoE has raised its growth forecast from 2% to 2.2% for 2016 and from 0.8% to 1.4% for 2017.

The FTSE 100 closed at a record high for the tenth successive day.  It is believed the weak pound vs. the strong dollar is key to its current wave of record highs.

MP’s asked Carney about Andy Haldane, chief economist’s comments as he described the collapse of the Lehman Brothers as his professions “Michael Fish Moment.” Weather forecaster Michael Fish failed to spot the incoming 1987 hurricane.

Carney spoke about Brexit in different terms stating that a pessimistic forecast over the Brexit vote was less serious to spot than the bank’s collapse.

He said, “This is about the near-term strength of the economy which is absolutely welcome,” the governor said. “Missing the financial crisis is a big deal … a different order of magnitude.”

Carney added, “I’m not saying there are not financial stability risks to the UK … but there are greater financial stability risks on the continent in the short term, for the transition, than there are for the UK.”