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Carney says BoE may have to break purdah period on EU referendum

Tuesday, May 24 2016
Bank of England Governor Mark Carney said on Tuesday that the U.K.’s central bank does plan on following the purdah period in the run-up to the June 23 referendum on the Britain’s membership in the European Union, but noted that Brexit risks could form a part of the Monetary Policy Committee decision scheduled for June 16 and thus could form part of the minutes. Testifying before the U.K.’s Treasury Select Committee Hearing on the May Inflation Report, Carney admitted that the June 16 decision could force the BoE to break the so-called purdah period that prohibits British civil servants from commenting on the upcoming referendum and will begin from Friday.
However, he noted that the BoE had already highlighted the risks associated with the uncertainty surrounding the possibility of a Brexit, as a vote to leave the EU is known, and that, in his personal view, he didn’t expect there to be any new details regarding the issue in the June 16 decision. Carney also reiterated that, due to the amount of uncertainty in the economy at the moment, the BoE could be either over- or under-estimating its current effect. 
 
Sterling is currently being traded few points above 1.46 level. Pair is likely to find support around 1.4550 handle and resistance above 1.4660 level. Later today, in the US session, New Home Sales figures are scheduled for a release.
More in this category: « ZEW Economic Sentiment unexpectedly declined in May New Home Sales rose to an eight year high »

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