BOE governor Carney continues to fend off the TSC
- a host of asset prices would be affected if UK voted to leave EU
- BOE has noted a marked increase in volatility options market around EU referendum date
- BOE will also look at function of gilt market
- impact of Brexit on capital inflows depends on how fast a new deal is negotiated
- if sterling fell sharply after Brexit the BOE would need to balance inflationary impact against disinflationary hit to domestic confidence
- GBP weakness has several causes including easing by ECB.
I highlighted the additional liquidity announcement by the BOE yesterday in my post earlier.
In a statement the Bank released yesterday said indexed long-term repo (ILTR) operations, which provide liquidity for banks, building societies and broker-dealers, would be held on June 14, June 21 and June 28.
"These operations are additional to the regular ILTR operations which will continue to take place once a month,"
"The Bank will continue to monitor market conditions carefully and stands ready to take additional action if necessary".
