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Bank of England sees short-term hit to UK economy from floods

Source: Reuters - Wed, 12 Feb 2014 11:00 PM
Author: Reuters
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LONDON, Feb 12 (Reuters) - Floods in parts of Britain will affect the short-term outlook for the country's economy but will not have an impact on monetary policy decisions, the head of the Bank of England said on Wednesday.

BoE Governor Mark Carney told ITV television that transport, farming and other businesses would be hit by the flooding.

"It is something that will affect the near-time outlook, but let me caveat all that because I start with the real human cost," Carney said in an interview.

"What tends to happen with natural disasters is that you get a hit to GDP as it's going on and then you get a recovery; you get that back later on with the repair, so when you look over the stance for the horizon that the Bank of England would operate, one looks through it," he said.

Parts of southwest England have been under water for weeks after the country's wettest January in nearly 250 years. More densely populated areas near London have also been hit by flooding in the last few days. (Writing by William Schomberg)

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