BOE's Carney: Brexit Changed the Economic Outlook

The transcript discusses the economic impacts of structural shocks and the limitations of monetary policy in addressing them. It outlines the Monetary Policy Committee's (MPC) measures to support the UK economy, including a reduction in the Bank rate and asset purchases. The economic outlook has changed significantly, with trade-offs between economic support and inflation targets. The effects of Brexit on demand, supply, and exchange rates are analyzed, highlighting challenges in investment and employment due to uncertainty and higher capital costs.

What was one of the measures taken by the MPC to support the UK economy?

• Increase in Bank rate

• Introduction of a new term funding scheme

• Reduction in corporate taxes

• Expansion of public sector employment

What major event influenced the MPC's economic outlook and decisions?

• The vote to leave the EU

• The global financial crisis

• The introduction of new technology

• The rise in global oil prices

How did the depreciation of sterling affect the UK economy according to the MPC?

• It increased imports

• It boosted exports

• It stabilized inflation

• It reduced the current account deficit

What is one factor expected to weigh on investment in the near term?

• Growth in the real estate market

• Decrease in interest rates

• Protracted period of heightened uncertainty

• Increased government spending

What challenge is associated with the higher cost of capital for UK-focused firms?

• Higher employment rates

• Stronger domestic demand

• Increased consumer spending

• Weaker activity in real estate