Mark Carney says sterling’s fall should ease UK account gap

Sterling's fall since last month's vote to leave the European Union should help to reduce Britain's large current account deficit, Bank of England governor Mark Carney said on Tuesday.

“Movements in sterling such as the depreciation we have seen should on the whole improve the current account balance, make it (the deficit) smaller,” MrCarney told MPs.

He said there were questions about what happens to the flows of foreign financing because of uncertainty about Britain’s economic prospects – whether the funding becomes shorter in duration, or reflects increased risk premiums in British assets.

“This is the less positive aspect of the current account adjustment,” Carney said.

Britain’s current account deficit stood at 5.4 per cent of gross domestic product in 2015, the highest for a full year since annual records dating back to 1948.

- Reuters