On 20th June, the Bank of England Governor, Mark Carney delivered a speech at The Mansion House in London.
What was discussed at The Mansion House?
The key reason for The Mansion House speech as to discuss the central bank’s interest rates. The speech came after the Monetary Policy Committee voted 5-3 in favour of holding rates. And despite the positive outcome, it was a lot closer than expected. With three voting in favour of a hike and others on the edge, it could easily have been a very different story. That’s three Bank of England gurus who believed interest rates should be increased to account for the pressure of inflation.
However, the current roller coasters that are consumer spending and business investment were cited by Carney as reasons not to opt for the increase. As was the uncertainty brought about by the ongoing Brexit negotiations. The upcoming uncertainty as EU discussions take place meant the MPC members chose to keep interest rates at the record-low level.
So for now we sit tight, safe in the knowledge that interest rate rises are on hold for the time being. However, this rift can’t be ignored and we must prepare for what could happen in the coming months.