BOE’s Carney Says Risks to Forecast Are Skewed to the Downside

The transcript discusses the UK's economic outlook, focusing on limited supply capacity growth and the impact of the UK's new trading relationship with the EU. It highlights the MPC's projections, which now assume a greater adjustment within a three-year period. The UK growth is expected to increase from 1% to 2.1% by 2022, supported by lower uncertainty, fiscal policy, and external demand. However, risks to potential supply and GDP growth are skewed to the downside due to uncertainties around the FTA with the EU.

What is the projected average growth rate of potential supply over the forecast period?

• 1/2%

• 3%

• 2%

• 1 1/4%

What assumption is the MPC's latest projection based on regarding the UK's new trading arrangements with the EU?

• Immediate adjustment within one year

• No adjustment needed

• A greater adjustment within the three-year forecast period

• A smooth transition over many years

By how much is UK growth projected to increase in 2021?

• 1%

• 1.6%

• 3%

• 2.5%

What is the expected level of excess demand by the end of the forecast period?

• 1%

• 1 1/4%

• 3%

• 2%

What factor contributes to the downside risk in the MPC's projections for GDP growth?

• Uncertainty around the FTA with the EU

• Increased fiscal policy

• Stable external demand

• High inflation rates