Brexit fears kick BoE into preemptive action – ANZ

By FXStreet Analysts at ANZ noted that the Bank of England (BoE) Governor Mark Carney offered a politically- neutral perspective on the UK’s upcoming referendum on EU membership at his hearing before the UK Parliament’s Treasury Select Committee.

Key Quotes:

“Carney refrained from providing a comprehensive BoE analysis of the economic advantages and/or disadvantages of EU membership for fear that it would be interpreted as an ‘official’ recommendation on EU membership (one way or the other).

Instead, the BoE’s analysis was limited to financial and monetary stability, and he did focus on the short- term impact that heightened uncertainty in the event of Brexit would have on such areas as inflation, sterling, domestic demand, financial stability, foreign investment and London City. That said, the BoE is still taking mitigating actions to manage the risks around Brexit to ensure the financial system’s resilience and make contingency plans for either outturn at the referendum on 23rd June. In this vein, yesterday the BoE announced that it will hold three additional indexed long-term repurchase operations (iLTROs) on 14, 21 and 28 June.

The operations will offer unlimited funds to commercial banks up until 8 December in order to offset any threat of a bank run and broader risks to …read more

Source:: FX Street