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BoE’s Carney ‘to stay on’ to ease Brexit talks

Mark CarneyBank of England Governor Mark Carney said he may well be open to staying on beyond his current term if it will help the government “smooth” the Brexit transition.

He is due to step down from the role in June 2019 and told the Treasury Committee that he has been talking to the chancellor about his future.

His predecessor Lord King criticised the Brexit preparations as “incompetent” saying it “beggared belief” that the world’s sixth-biggest economy should be talking of stockpiling food and medicines. This left the government without a credible bargaining position, he said.

That “a government that cannot take action to prevent some of these catastrophic outcomes illustrates a whole lack of preparation,” he said.

After Mr Carney’s comments the pound initially edged up slightly against both the dollar and the euro but later fell back -0.11% against the dollar to take the two-day loss to -0.80%.

Adding to the pain was a much softer than expected August construction PMI (52.9 vs. 54.9 expected).

The FTSE 100 opened 0.5% lower on Wednesday at 7,421 as emerging markets have been particularly weak. A lack of progress regarding international trade talks continues to unsettle investors.

Stock markets fell in Asia and the safe-haven dollar hovered near a two-week high as heightened worries over international trade conflicts and emerging market weakness curbed investors’ appetite for riskier assets.

The Shanghai Composite Index retreated 0.9%, weighed down by expectations the United States will impose more tariffs on Chinese goods this month, adding to pressure on China’s cooling economy.

The US equity market outperformed all other markets (with the exception of Italy). The S&P 500 finished last night -0.17% and NASDAQ  -0.23%.

Amazon joined Apple in briefly passing the $1tn market cap mark, though with a slightly different price-to-earnings ratio of approximately 200x compared to Apple’s 20x.

Housebuilder Barratt Developments reported a 9.2% rise in full-year pre-tax profits on revenues 4.8% higher.

Pre-tax profits hit £835.5m in the year to the end of June from £765.1m previously. Sales reached £4.8bn from £4.6bn.

 



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