Pound drops as BOE's Carney says now isn't time to raise rates

If the exit poll proves correct, the shock result would plunge domestic politics into turmoil and could delay Brexit talks.

LONDON: The pound fell after Bank of England Governor Mark Carney said he is still worried about the impact Brexit would have on the U.K. economy and signaled he wasn’t in a hurry to raise interest rates any time soon.

Sterling weakened against all of its Group-of-10 peers after Carney’s views went against the three of the eight Monetary Policy Committee who unexpectedly voted last week for an increase in rates as inflation in the U.K. surged.
 
The Governor addressed the weakness in the economy and the increased uncertainty as the nation formally starts talks to exit the European Union.

“Carney pushed the pound lower” on comments that now wasn’t the time to hike rates, said Neil Jones, head of hedge fund sales at Mizuho Bank. 

“Market sentiment towards sterling had shifted towards a possible rate hike following a shock shift to 5-3 last week from the MPC. The balance is being addressed somewhat at Mansion House.”

GBP/USD falls 0.5% to 1.2678, after reaching a one-week low of 1.2668EUR/GBP climbs 0.5% to 0.8796 Yield on 10-year gilts drops 2 bps to 1.01% 

The U.K. lost its first battle with the European Union over the timetable for Brexit talks as the bloc’s chief negotiator Michel Barnier warned that the consequences of leaving will be “substantial”. - bLOOMBERG