Bank of England's Carney steps up as Brexit crisis engulfs UK

Wed Jul 6, 2016 12:48pm EDT
 
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By William Schomberg

LONDON (Reuters) - As Britain struggles with political chaos following its vote to leave the European Union, central bank governor Mark Carney has stepped into the breach to manage the economic fallout.

His response to the outcome of the June 23 referendum, starting with a televised address barely an hour after the final result was declared, contrasts with that of finance minister George Osborne, who did not appear publicly for three days.

With sterling and stock markets plunging as the "Leave" campaign headed for victory, Carney had arrived at the Bank at around 4 a.m. to prepare to tell the country that the economy was well prepared for the turmoil ahead.

It was the first of three interventions aimed at calming investors and reassuring companies and households that the economy was in safe hands, even after Prime Minister David Cameron announced his resignation in the wake of his referendum defeat, leaving the government in limbo.

"The governor of the Bank of England, once again, is offering clear leadership and boosting business confidence at a time of political and economic uncertainty," the head of the British Chambers of Commerce, Adam Marshall, said.

Analysts at Brown Brothers Harriman, a financial services firm, said the Bank of England seemed to be among the only centers of power in the UK with a game plan, describing Carney in an email to clients as the "adult in the room."

A week after the vote, with the ruling Conservatives and the opposition Labour Party both consumed by infighting, Carney gave an unusually explicit signal that the Bank was poised to pump more stimulus into the economy in the coming months.

He echoed the refrain of European Central Bank President Mario Draghi, who said in 2012 that the ECB would do "whatever it takes" to save the euro. Carney said the BoE would "not hesitate to take any additional measures required".   Continued...

 
Bank of England governor Mark Carney pauses as he speaks during a news conference at the Bank of England in London, Britain July 5, 2016. REUTERS/Dylan Martinez/File Photo