S&P: Meaningfully Undervalued Pound to Remain Some Time
Mark Carney’s inflation problem goes beyond surging import costs. The falling pound is already fueling inflation, and Brexit could compound the impact if it makes foreign workers scarcer, hits investment and weighs on productivity. Carney, who just extended his time as Bank of England governor by a year to help steer Britain through the transition, has warned of the dangers to the supply side of the economy. “The Bank of England is now facing a difficult arbitrage between higher inflation and persistently lower growth,” Jean-Michel Six, Standard & Poor’s economist told Guy Johnson on "Bloomberg Markets: European Open." He expects it to “see through the rising inflation and focus on mid-term economic growth prospects,” he said.