Bank of England joins the hawks

Reserve Bank of India also raised the average inflation projection for the second half of the year to 4.8% from 4.7% in June

Carney, who is due to step down next year after Britain leaves the European Union as scheduled in March, said no-deal was "a relatively unlikely possibility but it is a possibility".

His remarks pushed down the pound against the dollar (GBP/USD) to below $1.30, amid fresh fears about the impact of Brexit on the United Kingdom economy and the slow pace of interest rate rises in the years ahead. It suggested the United Kingdom would fall into a recession and interest rates and unemployment would soar. In a BBC Radio interview on Friday, he said a disorderly Brexit is "highly undesirable".

Mr Carney said: "We have been planning for very hard circumstances and the banks are ready".

The Bank of England has increased interest rates to their highest level for almost 10 years after the summer heatwave helped the economy bounce back from a snow-hit start to the year.

The Brexit negotiations were entering a "crucial phase" he said and there was a broad range of potential outcomes to the discussions with the remaining members of the EU.

But it also said inflation - now running at 2.4% - was set to rise slightly higher than it had predicted in May's set of forecasts after recent falls in the value of the pound and higher energy prices.

Mourinho frustrated by Martial's absence with Matic to miss start of season
United is without a number of players after they were given extended breaks following the 2018 World Cup in Russian Federation .

During the interview, Carney also cited the scenario from the Bank of England's last stress test - the annual test to make sure Britain's banks could handle a financial crisis and economic downturn - which suggested that in a no deal scenario, the United Kingdom could fall into a recession and see unemployment more than double to 9%.

But he insisted stress tests ordered by the Bank had ensured that Britain's financial institutions, which have tripled their capital and increased their liquidity by 10 times, would be able to cope.

After the result of the referendum, the Bank of England cut interest rates to 0.25% - and raised them back again last November - and Carney said this action had been justified as the United Kingdom economy had grown less quickly than the Bank would have expected without Brexit.

"The MPC continues to judge that the United Kingdom economy now has a very limited degree of slack", the committee said in minutes published with its decision. Now, for the first time in nearly a decade, official interest rates are above the level they reached in the crisis. The Institute of Directors said the bank had "jumped the gun" and the debt charity StepChange is concerned about the impact on families already struggling with their debts.

The report showed its predictions are based on financial market expectations for rates to rise to 1.1% by mid-2021, which would suggest two more quarter-point rises.

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