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Two wanted cut

Bank of England in surprise split on interest rate policy

Mark Carney

Mark Carney: may extend his term

Two members of the Bank of England’s monetary policy committee (MPC) unexpectedly voted to lower interest rates over concerns of economic slowdown.

Others on the nine-member committee said they would consider a cut if global and Brexit pressures do not ease.

The MPC voted 7-2 at its November meeting to keep bank rate at 0.75% against all expectations of another unanimous verdict.

Two external members, Michael Saunders and Jonathan Haskel, were the first to cast votes for lower rates since the last cut in August 2016 in the wake of the EU referendum. 

The prospect of a lower rate sent sterling to a two-week low against the US dollar despite governor Mark Carney erring against such expectations.

He said there were hopes that Britain’s protracted Brexit uncertainty might end soon.

Speaking at a press conference, he did not rule out extending his term again despite planning to leave his post at the end of January.

When asked about his departure, Mr Carney said he was committed to ensuring a smooth transition to his successor.

He has already extended his term to help with the fallout from Brexit, but with the UK now expected to leave the EU on Mr Carney’s last day in office, time is running out to find his replacement.

Mr Carney said it was “understandable” the government has not yet made a decision on his successor “given the priority” of Brexit.

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