Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

BoE’s Carney Adopts More Positive View Of Post-Brexit U.K., Boosts Sterling

By (Darrell Delamaide/ OverviewFeb 26, 2019 12:21AM ET
BoE’s Carney Adopts More Positive View Of Post-Brexit U.K., Boosts Sterling
By (Darrell Delamaide/   |  Feb 26, 2019 12:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Though Westminster has more influence over the pound sterling at the moment than the Bank of England as Parliament votes on Brexit procedures, it has not gone unnoticed that central bank governor Mark Carney has tempered his fear-mongering. Rather, he's taking a more optimistic and constructive stance toward Britain’s looming exit from the European Union.

For months, the central banker has been warning of instability, disruption and other dire consequences from Brexit. After the BoE’s policy meeting in early February, he was complaining about the “fog” of Brexit and the risk of recession. But then, a few days later, Carney sounded almost as if he’d taken a page from Prime Minister Theresa May’s vision of a post-Brexit Britain.

“In many respects, Brexit is the first test of a new global order and could prove the acid test of whether a way can be found to broaden the benefits of openness while enhancing democratic accountability,” Carney said in a speech at Frobisher Hall on the global economic outlook. “Brexit can lead to a new form of international cooperation and cross-border commerce built on a better balance of local and supranational authorities.”

GBPUSD 300 Minute Chart
GBPUSD 300 Minute Chart

The pound reacted positively to his speech on Feb. 12, even as a no-deal Brexit grew likelier by the day.

This week, Carney signed accords with U.S. regulators to keep derivatives markets open and resilient, noting that the two countries are hosts to the biggest such markets and have an obligation to maintain them for the important role they play in pensions and investments. Regulators in other European Union countries have also been scrambling to pass legislation allowing at least temporary access to London’s derivatives markets.

As Britain starts the final month’s countdown to leaving the EU, the financial picture in general is clearing up—whether there is a deal or a delay or not. One thing already clear is that there has been no Brexodus, that feared mass migration of tens of thousands of jobs from London to the continent.

“Nobody is abandoning London,” EY partner John Liver told The Wall Street Journal in a report on the flight from the U.K. that never happened. “Broadly, everybody still treats London as their global financial center in this timezone.”

Small wonder. London always liked to say that it had more people working in financial services than Frankfurt’s total population. And indeed, the centuries-old financial infrastructure in London simply can’t be matched and the scramble to keep derivatives trading and clearing in the U.K. drives that point home.

Carney has worked hard despite his fear-mongering to minimize chances of disruption. This week’s accord with U.S. regulators may mark the turning point to his playing a consistently more constructive role.

The Frobisher Hall speech put Brexit in the context of global tensions and, somewhat radically, suggested Britain might be a forerunner of how countries are responding to the negative consequences of globalization, especially the loss of democratic accountability. Carney particularly criticized barriers to free trade in services, which he said are three times higher than those for goods. Eliminating this differential, he said, would cut the U.S. deficit by one-third and the U.K. deficit by one-half. He seems less afraid of Britain facing trade issues independently and keen to portray the U.S. and U.K. as peers in a global financial system.

Post-crisis financial reforms through the G20, Carney continued, shows how to “rebalance” the prescriptive supranational rules toward more differentiated, national approaches to achieve common outcomes.

If you don’t hear echoes of the Leave campaign in this, you’re not listening closely enough. Brexit, in Carney’s new approach, provides a model for rebalancing the roles of local and supranational authorities. “In these respects,” Carney concluded, “Brexit could affect both short and long-term global aspects.” And he clearly means in a positive manner.

BoE’s Carney Adopts More Positive View Of Post-Brexit U.K., Boosts Sterling

Related Articles

BoE’s Carney Adopts More Positive View Of Post-Brexit U.K., Boosts Sterling

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
sixtus udeke
sixtus udeke Feb 26, 2019 10:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
@6Insights: I am confident, and happy that England is finally getting it...
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email