BoE official: Paris attacks unlikely to have much impact on UK or global economy

LONDON: The attacks in Paris are unlikely to have a significant impact on the British or global economy, a Bank of England policymaker was quoted yesterday as saying. Don Kohn, a member of the BoE’s Financial Policy Committee, said the effects of the Nov. 13 attacks by militant Islamists, which killed 130 people, remained unclear but that similar incidents in the past had not had a big economic impact.

“Unfortunately these things have happened periodically but for the most part they have left a small imprint on the economy,” Kohn told the Kent Messenger newspaper during a visit to businesses in the county of Kent in south-east England. “Economies have proven resilient to these terrible threats. My hope and expectation is the UK and global economy will continue to be resilient to this kind of violence.” However, he added that such attacks increased uncertainty. Bank of England deputy governor Ben Broadbent made a similar point after a speech at Thomson Reuters last week.

Kohn also said he was watching British house prices, which are starting to pick up speed again after a hiatus in the latter part of 2014 due to tighter mortgage regulation. “Our goal is not to constrain lending but to make sure the lending terms don’t deteriorate and get so loose under the pressure of rising house prices that there are problems coming down the road which would affect the stability of the system.” Surveys from mortgage lenders Nationwide and Halifax showed house prices picked up more strongly than expected in October. In September the FPC said it expected house price inflation to pick up and that it would closely monitor Britain’s so-called buy-to-let market, dominated by small landlords. — Reuters