Carney on GBP • By Spring expect to see inflation of 1.5-1.8% • We will relatively quickly see the effect of sterling on inflation • There are limits to willingness to look through inflation overshoots Some creating jawboning from Carney today
And so as I have said here before with a lower exchange rate we can in due course expect something of a return to a more 'normalized' Interest Rate Policy. Savers will be relieved and homeowners will groan as their mortgages (that have been artificially low for years) increase the monthly interest cost.
The Pound under those conditions would find its new level and stabilize.