"Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption," he said. "Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. "Now is not yet the time to begin that adjustment," he said. "In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to ... the reality of Brexit negotiations. "Carney underlined the importance of free trade - especially in financial services - and said the EU it would face greater costs if it tried to remove activities such as clearing euro-denominated derivatives from London.He also said that whether Britain's large current account deficit was sustainable remained an open question, "one whose answer depends crucially on the outcome of the Brexit negotiations".

Source: Economic Times June 20, 2017 09:11 UTC