LONDON — The Bank of England has limited power to prevent the painful economic adjustments that will come as a result of Brexit, Governor Mark Carney said on Thursday morning.
Speaking at the bank’s “Independence: 20 Years On” conference to commemorate the granting of the central bank’s independence in the 1990s, Carney said that he and the rest of the bank’s senior policymakers do not have “omnipotence” and cannot completely offset any economic hardshop caused by Brexit.
“While carefully circumscribed independence is highly effective in delivering price and financial stability, [the BoE] cannot deliver lasting prosperity and it cannot solve broader societal challenges,” Carney said at the City of London’s Fishmongers’ Hall.
“The biggest determinants of the UK’s medium-term prosperity will be the country’s new relationship with the EU and the reforms it catalyses,” he added.
“Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU.”
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