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Business

Carney: UK economic outlook now 'challenging'

Opening sequence

Opening sequence

Business

Carney: UK economic outlook now 'challenging'

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COMING UP:Carney: UK economic outlook now 'challenging'

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Transcript

00:00:00
>> The UK has entered a period of uncertainty and significant economic adjustment.>> And that's putting it mildly. Mark Carney laying out the Bank of England's take on Brexit on Tuesday. The BoE governor says prospects for financial stability are challenging. That's central bank speak for not great. Reuters' senior UK economics correspondent David Milliken was there as Carney listed his concerns.
00:00:26
>> One sort of area is in Britain's large current account deficit, where the central bank is getting worried that foreign investors are less willing to fund it. Another area is in commercial real estate. Standard Life had to close its real estate fund because too many people were taking money out.
00:00:43
And the Bank of England is concerned that this could have knock-on effects on the wider economy.>> The bank not waiting for its next policy meeting to take action. It's reducing the amount of money that banks are required to keep in reserve. That could free up as much as 150 billion Pounds for extra lending.
00:01:01
Whether there's demand for more borrowing, though, that's another matter.>> It's a big question whether banks will in fact lend that amount of money out. Bank of England was saying today that it will very much depend on demand for credit. Essentially, banks will be there if people want to borrow to buy a house or if people think they've got a good business plan which they need investment money for.
00:01:20
But there's a big question mark with the economic outlook as it is, whether people will want to still go ahead and borrow.>> More action certain. Carney already hinting that a rate cut is likely. The Bank of England could also start buying bonds again, as a way to pump cash into the economy.
00:01:37
It all hangs on how bad things get and how fast.