Mark Carney: Bank of England had to act now to stabilise economy

The Governor of the Bank of England, Mark Carney, has warned that the UK will continue to face a period of uncertainty following its decision to leave the European Union.

But he said the economy will avoid a recession because of the actions of the Bank of England today.

Speaking to ITV News Economics Editor Noreena Hertz, Mr Carney said the Bank had cut interest rates to 0.25% and approved a stimulus package which includes £45bn extra in quantitative easing, to offset the affects of Brexit.

He said the economy was facing a slowdown because the UK has to renegotiate its new trade relationship with the EU and the rest of the world, and this will take time.

Mr Carney added that the Bank of England had decided to act now to minimise the impact of the uncertainty, which was likely to lead to less investment, high unemployment and stagnant growth.

Mr Carney insisted that the UK economy is "one of the most flexible economies in the world" and was able to respond to adversity because of its "tremendous human capital".

But it will go through an adjustment period that will negatively impact the country's growth.

While acknowledging that the Bank's measures will have to work alongside any additional government plans for the economy, Mr Carney said he had spoken to the new Prime Minister Theresa May and Chancellor Phillip Hammond, and was confident that they are making the necessary preparations.

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