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Business

Bank of England changes tune on growth

Opening sequence

Opening sequence

Business

Bank of England changes tune on growth

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17:37
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COMING UP:Bank of England changes tune on growth

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Transcript

00:00:00
>> So what did we miss? And what have we learned about the adjustment to Brexit?>> In utter humility, perhaps, from Mark Carney, the Bank of England Governor keeping rates on hold and admitting that his team overestimated the impact of Brexit. That, after a spate of better than expected data on the economy.
00:00:18
We're to senior UK expert economics correspondent, David Millican.>> He is very keen to clearly to sort of look forward and sort of talk pretty much about what was happening with the economy over the next few years rather than his own future. He definitely didn't want to address little questions about sort of the whys and wherefores of his decision to stay at the bank for an extra year to 2019.
00:00:38
Instead, he was sort of keen to sort of make the point that the short-run outlook for the British economy is noticeably brighter than the bank thought just three months ago. That he was sort of pleased to see that.>> The bank's now almost doubling its growth forecast for 2017.
00:00:51
Shoppers and home buyers proving resilient. But it's not all good news. Growth forecast for the following years, cut. Inflation also expected to rise sharply as a weaker sterling drives up the cost of imports. That leaves the bank with a tough call on rates.>> If sterling falls sharply, in fact, it's going to give a further push up to inflation, beyond what we've already seen.
00:01:14
Again, that's going to make some people at the bank start to think, are we getting closer to a time where instead of thinking of cutting rates, we'll need to raise rates?>> That won't happen any time soon. Carney says he now has a neutral stance on rates. Euro skeptics say that should be his position on Brexit too.