Governor Mark Carney says Bank of England ready to offer £250bn support
- Credit: PA
Bank of England governor Mark Carney has said volatility 'can be expected' in the wake of the Brexit vote but said the Bank is prepared to provide £250bn to support markets.
He said: 'Some market and economic volatility can be expected as this process unfolds.
'As a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities.'
'The bank will not hesitate to take additional measures as required as markets adjust and the UK economy moves forward.'
As he spoke, more than £100bn was being wiped from the FTSE and the pound was crashing against the dollar.
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Mr Carney also offered reassurance that there will be no immediate changes as a result of the vote.
He said: 'There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold. And it will take some time for the United Kingdom to establish new relationships with Europe and the rest of the world.'
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He also said that the bank has put in place extensive contingency plans and claimed that the 'core of our financial system is well-capitalised, liquid and strong'.
'This resilience is backed up by the Bank of England's liquidity facilities in sterling and foreign currencies. All these resources will support orderly market functioning in the face of any short-term volatility,' he added.
The CBI welcomed the governor's intervention. Chief economist Rain Newton-Smith said: 'We need strong and calm leadership to reassure the markets.
'The Bank of England is clear that it stands ready to provide additional liquidity and to take other necessary measures – this should help to calm markets and shore up confidence in the UK economy.
'As the governor said, the UK's financial system is resilient. UK banks are well-capitalised, with a large quantity of high quality liquid assets, and have been stress-tested against tougher conditions than where we are now.'