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By David Robinson
     LONDON (MNI) - Bank of England Governor Mark Carney said the monetary
policy response to Brexit would not be automatic, but would depend on how the
UK's departure from the EU impacted the balance between supply and demand as
well as the exchange rate.
     Carney's comments in a speech in Dublin echoed comments by Deputy Governor
Ben Broadbent that market participants should not take the Bank's response to
any form of Brexit for granted. The Monetary Policy Committee could, for
example, sanction a hike is the supply side is hit but consumer demand holds up
and sterling falls.
     Following are main points from Carney's speech:
     -The BOE is well prepared for all Brexit scenarios and while the MPC will
do what it can to support jobs and growth "the appropriate policy response is
not automatic and will depend on the balance of the effects on demand, supply,
and the exchange rate," Carney said.
     -Brexit continues to overshadow the economic outlook near-term.
     "Developments regarding the United Kingdom's withdrawal from the European
Union are the most significant influences on the economic outlook," Carney said,
noting that it has already had a dampening effect on business investment.
     -The Monetary Policy Committee's central forecast, assuming a smooth
Brexit, is for steady growth, albeit subdued by historical standards, resulting
in gentle policy tightening with inflation around target as
domestically-generated inflation picks up reflecting rising earnings.
     Recent earnings data supported the MPC's view of "domestically-generated
inflation at rates consistent with the 2% inflation target."
     -The bulk of Carney's speech was on the potential impact of the Fourth
Industrial Revolution, which embraces robotics, nanotechnology and giant strides
in computing power.
     He said if it resembled previously technological revolutions it would
eventually be labour augmenting, but in the interim could result in rises in
unemployment and inequality.
     -The BOE Governor gave no indication of the likely timing of the next rate
hike, echoing the absence of guidance in the MPC's September minutes.
--MNI London Bureau; tel: +44 203-586-2223; email:
[TOPICS: M$B$$$,M$E$$$,M$$BE$]