Mark Carney (Governor of the Bank of England) yesterday said that a deteriorating outlook meant action from the Bank was likely this summer. In other words rates will be cut, and quantitative easing (helicopter money) will be applied.
It is ironic that little over a week ago Project Fear was telling all and sundry that Brexit would lead to increased rates as Sterling would fall through the floor.
Sterling has fallen, but it has now levelled out at around $1.33 and markets are gradually rising.
As I have stated before, a fall in Sterling will make British assets look cheap to international investors. More to the point, central bankers around the world would sell their grandmothers to have been given an opportunity to stage a one off devaluation of their currencies that Carney was given courtesy of Brexit.
The currency wars are upon us, and Britain has managed to achieve victory without firing a single monetary shot.
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