Experts said that the post-Brexit bounceback may be fuelled by expectations that the Bank of England will cut interest rates in August. He said: ‘In my view, and I am not pre-judging the views of the other independent Monetary Policy Commitee members, the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer. The central bank’s Monetary Policy Committee is scheduled to make an initial assessment of the situation on July 14, before publishing updated growth and inflation forecasts in its August “Inflation report�. However, the central banker’s comments of a possible rate cut sent the British pound lower to $1.3284 US dollars – within striking distance of the post-Brexit lows of $1.3121. Shares were up more than 2% at the FTSE 100 surged to its highest level since December after the speech, which comes just days after the yield on 10-year British government bonds fell below 1% for the first time and after the pound fell to a 31-year low on Monday. Speaking today in his second speech since the European Union referendum result was announced on 24 June, Carney reassured the financial market that the Bank of England was well prepared to provide the additional liquidity to combat the severe market headwinds that struck even before the official result was announced. Carney’s view is being echoed across the financial sector, and predictions about a coming recession are now widespread, with some banks estimating that Brexit could wipe an average of 4% off the UK’s previous growth estimates over the next three to four years. On Thursday, Carney said the FPC will “take any further actions it deems appropriate to support financial stability�. Dublin’s Iseq jumped 1.9 per cent, having rebounded 8.5 per cent from its lows on Monday following two days of heavy selling in which the index slumped 17 per cent in the wake of the United Kingdom vote to leave the EU. Ben Brettell, senior economist at Hargreaves Lansdown, commented: ‘Once again we seem to be in a world where a few words from a central banker can move markets in an instant. “They are working well�. The Euro Stoxx 600 gained one percent, Germany added 0.71 percent and France’s CAC 40 gained 1 percent. He added that the uncertainty caused by last week’s Brexit vote will “weigh on our economic prospects for some time�. The key interest rate is now at 0.5 percent. He hinted that part of the Bank’s response could be to cut interest rates in the summer. Interest rates have been at 0.5% for more than seven years after they were slashed during the UK’s downturn and the global financial crisis.

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