Bank of England Governor Mark Carney held a press conference Thursday lunchtime after the central bank raised interest rates for the second time in less than a year.
The institution's decision was widely expected after Chief Economist Andy Haldane joined policy hawks Michael Saunders and Ian McCafferty in voting for a rise in the base rate in June.
Policymakers voted unanimously Thursday to increase interest rates from 0.5 percent to 0.75 percent.
Brexit was a key point of discussion during the meeting of policymakers. Carney earlier this week told Bloomberg News that the U.K.'s decision to leave the European Union "takes 50 percent of my time now."
At the press conference on Thursday, Carney said that Brexit talks were entering a "critical period" as U.K. and European negotiators edge toward an agreement on the future relationship between the two. Talks are expected to conclude in agreement by October, and the U.K.'s withdrawal from the bloc is slated to begin on March 29, 2019 — however, that exit comes with the caveat of a "transition period," during which EU rules will continue to apply until the end of 2020.
The British pound declined against the U.S. dollar after Carney told reporters monetary policy "needs to walk — not run — to stand still."
Carney also spoke about the prospect of a trade war being ignited by the U.S. Discussing the possible impact such an all-out trade war would have on the U.K., the central banker said: "The U.K. can be affected by a trade war scenario and a ramping up of tariffs and asymmetric response — everybody responding with the U.S. at the center."
He said the U.K. would be affected if a trade war was to impact on global confidence and financial markets.
