The UK's economic recovery is "not assured" despite a drop in Brexit uncertainties, the Bank of England's outgoing governor Mark Carney said today.
"UK GDP growth was projected to pick up from current below-potential rates, supported by the reduction of Brexit-related uncertainties, an easing of fiscal policy and a modest recovery in global growth.
"This rebound is not, of course, assured," Bank of England chief Carney said in a speech ahead of his departure in March.
"The economy has been sluggish, slack has been growing, and inflation is below target. Much hinges on the speed with which domestic confidence returns," Carney said, referring to recent monetary policy committee (MPC) findings.
"As is entirely appropriate, there is a debate at the MPC over the relative merits of near term stimulus to reinforce the expected recovery in UK growth and inflation," he said.
The pound fell half a percent against the euro and dollar following his comments.
Andrew Bailey, head of the UK's Financial Conduct Authority regulator, will replace Carney as Bank of England chief on March 16.
In line with Carney's cautious outook, retail earnings out today painted a tepid picture.
Britain's biggest retailer, supermarket giant Tesco, said UK sales grew by just 0.1% in the six weeks to January 4 - that included the key Christmas trading period.