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A8 WORLD NEWS
Friday 9 February 2018

UK ready to tighten money taps despite Brexit uncertainty

By PAN PYLAS Brexit process.
Associated Press When more clarity emerg-
LONDON (AP) — With the es over what Brexit actu-
global economy growing ally will entail when Britain
strongly, the Bank of Eng- leaves the EU in March
land has become more 2019, Carney said the Bank
confident about Britain’s of England will need to ad-
prospects and indicated just its forecasts.
it could raise interest rates In recent weeks, the mi-
in coming months — even nority Conservative gov-
in the face of the welter of ernment has become in-
uncertainties related to the creasingly split over how to
country’s exit from the Eu- handle Brexit. While some
ropean Union. lawmakers in Prime Minister
Though it kept its main inter- Theresa May’s party want
est rate on hold at 0.5 per- close ties with the remain-
cent Thursday, the bank in- ing 27 EU nations and a
dicated that it could make period of transition, others
another three quarter- want a more fundamen-
point hikes over the coming Placards and banners opposing Brexit on railings as The European Commission's Chief Negotiator tal break that would see
three years, one more than for the UK exiting the European Union, Michel Barnier is at 10 Downing Street for a meeting, outside Britain diverge more pro-
previously expected. the Houses of Parliament, London, Monday, Feb. 5, 2018. foundly on matters related
The next hike, many in- (AP Photo/Tim Ireland) to regulations and trade.
vestors are betting, could Meanwhile, the views of
come as soon as May, years of cheap cash that power. able to get “a smooth ad- the opposition Labour Party
when the central bank will has spooked investors this Though the outlook for the justment” to a new trading are also unclear.
publish its next set of quar- week, particularly on Wall British economy is condi- relationship with the EU. May hopes to agree soon
terly economic projections. Street. tional on the outcome of Bank Governor Mark Car- on the terms of a transition
The pound rose sharply on High inflation is the Bank the Brexit discussions, par- ney said “developments deal with the EU that would
the news, gaining 1.1 per- of England’s main reason ticularly what the future regarding the United King- see Britain remain in the
cent to $1.4033 as investors for wanting to raise rates. trading relationship with dom’s withdrawal from the tariff-free European single
factored in the prospect of Prices have risen sharply the EU will be, the cen- European Union are the market and customs union
higher rates. due to the pound’s plunge tral bank said “monetary most significant influences for a period after Brexit day.
A hike in May would be the after the June 2016 vote for policy would need to be on — and sources of un- That would give firms and
bank’s second in six months Brexit, which simultaneously tightened somewhat ear- certainty about — the eco- households time to adjust
following one in November, pushed up import costs, lier and by a somewhat nomic outlook.” to a new relationship with
which was the first in a de- notably of food and ener- greater extent” than it an- That means that forecasts the EU — Brussels has said
cade. It would also echo a gy, and weighed on eco- ticipated in November. are liable to change in light any transition period should
global trend toward tighter nomic growth by reducing That view includes an as- of what Carney has called finish by the end of 2020.
monetary conditions after households’ purchasing sumption that Britain will be the “twists and turns” of the q

France to boost military spending, modernize army

PARIS (AP) — French Presi- all defense spending from She insisted that France up collective European defense spending and per-
dent Emmanuel Macron's 2019 to 2025. That includes needs more defense defense capacity and sonnel cuts under Macron’s
government is ramping up 1.7 billion euros in addi- spending to maintain its strengthen the EU as Brexit predecessors, the govern-
military spending, arming tional spending each year global influence and "inter- looms. ment now is promising 6,000
drones and hiring more through 2022, particularly vene where its interests are The plan aims to fulfill Ma- more jobs by 2025.
"cyberfighters" for Europe's to modernize equipment threatened, and where it's cron's campaign promises The bill also includes
biggest army — notably and improve intelligence. needed for international last year to raise defense France’s first armed drones,
amid demands by NATO "The world is more uncer- stability." spending to 2 percent of new nuclear combat
and U.S. President Donald tain, and the threats are France has thousands of GDP by 2025, in line with submarines, more fighter
Trump for European coun- more and more diffuse," troops overseas, from the what NATO wants from all planes and new intelli-
tries to pitch in more for Defense Minister Florence Middle East to Africa, and members. At a NATO sum- gence satellites.
their own defense. Parly told reporters, noting will be the EU's only nuclear- mit in May, Trump reiterat- The bill goes to parliament,
The French defense minis- growing demands for do- armed nation when Britain ed longstanding U.S. pres- where it’s expected to face
ter presented a bill Thurs- mestic military deployment leaves the bloc next year. sure on allies to increase a few months of discussion
day foreseeing 295 billion after a string of deadly ex- The military upgrade is part military spending. before a final vote this sum-
euros ($364 billion) in over- tremist attacks. of Macron's efforts to beef After a steady decline in mer. q