Bank of England governor Mark Carney backs Brexit in stages

Bank of England governor Mark Carney has said a transition agreement for EU withdrawal is in everyone’s interest and said it may be appropriate to raise interest rates as Brexit-fuelled inflation is set to rise further.

Mr Carney told MPs that policymakers on the bank’s Monetary Policy Committee believed a rise in interest rates may be needed over the coming months as it looks to tackle surging inflation caused by the weak pound.

However, his comments sent sterling lower, with investors taking it as a sign that the bank’s first rate hike in decades could come later than predicted. Economists have been pencilling a rate hike in November, when the bank’s next decision and latest set of forecasts are due.