That’s it for today, thank you for joining us. We’ll be back again in the morning. AM

German finance minister Wolfgang Schaeuble has been speaking in Brussels, where he joined other EU finance ministers for the latest Ecofin meeting.

He called for Britain to be clear about its Brexit decision as soon as possible to limit long-term uncertainty.

Speaking separately in Berlin, the German Chancellor Angela Merkel said her government’s goal is to ensure Brexit does not have an impact in Germany.

The pound is up 1.2% against the dollar, at $1.3152.

It is up 0.9% against the euro at €1.1850.

Back in the wider world, European markets are higher.

The FTSE 250 is up 0.6% at 16,803.

Will the Brexit decision be negative for foreign direct investment over the long term, Tyrie asks Richard Sharp, an external member of the FPC?

In the short to medium term yes, Sharp answers, in the longer term it will depend on policies and agreements struck.

And that concludes the session. Full story and summary to follow.

The governor says a weaker pound should improve the current account deficit, making it smaller.

If maintained, the drop in the pound since the referendum would reduce the current account deficit by about a third, Carney estimates.

Turning to the downsides of the Brexit vote for the current account, Carney includes the reduction in foreign investment in UK commercial property, and the “modest increase” in risk premium associated with UK assets.

When institutions try to bluff their way through risks, sweeping them under the carpet it is “exactly the wrong thing to do”, Carney says.

Carney turns to the fall in the pound since the referendum.

The exchange rate move can help the UK adjust to the post-Brexit environment, including the change in trade terms that will follow, the governor says.

FPC member Donald Kohn says that if you are going to make a major decision to build a factory or open a new office in the UK, you would want to know what the terms of trading would be with other countries.

Andrew Tyrie follows up by saying the Bank’s MPC and FPC would have come in for considerable criticism had they not commented on the potential consequences of Brexit in the run up to the referendum.

Deputy governor Cunliffe says the Bank’s reputation would have been damaged if it had not warned of Brexit risks before the vote.

Conservative MP Jacob Rees-Mogg is up. He clashed with Carney in the run-up to the referendum, accusing the governor of being in the pocket of the chancellor on the remain side of the campaign.

Rees-Mogg asks whether the Bank must be like Caesar’s wife, “above suspicion”?

The MP is pressing on with the idea that Carney showed political bias in the run-up to the referendum by arguing that being a member of the EU would be net beneficial for the UK economy. Carney rejects the idea.

The Conservative MP is now taking Carney to task on his comment pre-referendum that UK rates could go either up or down in the event of a Brexit vote.

Was it ever likely that policy would be tightened, Rees-Mogg asks, or did it just suit the chancellor’s argument? Carney says the statement was a balanced view, reflecting the views of the MPC as a whole.

The governor is keeping a fairly cool head in the face of some hostile questioning by Rees-Mogg.

Carney gets the last word, suggesting those questioning whether the Bank was biased “should consider their [own] motivations their judgements?”

Markets are hedging “downside risk” according to Carney, which is why we have seen record low bond yields.

Low bond yields do not give an accurate signal of the future of the UK economy. “The financial system can withstand huge shocks. There will be growth”.

FPC member Donald Kohn says the most likely scenario of a rise in UK interest rates is a strong economy. “It doesn’t necessarily have to be all bad news.”

Sir Jon Cunliffe, the Bank’s deputy governor for financial stability, says we have seen the beginning of financial markets putting a risk premium on UK assets.

However, his FPC colleague Donald Kohn says this is limited, because the banks are better capitalised than they were in the run-up to the financial crisis.

Carney says consumers are in a better position than they were in the run-up the crisis, less indebted.

So households indebtedness now poses a smaller risk to financial stability.

Labour’s Mann asks the governor how the Bank might deal with the short term risks posed by a potential second referendum on Scottish independence.

He says the issue of UK bank headquarters should be addressed well before any future decision on independence.

Now to Italian banks. Carney says there is a macroeconomic risk posed by Italian banks and their bad loans and the Italian authorities are looking at it.

The UK’s exposure is “modest,” the governor says.

Labour MP John Mann is bringing Carney to task on property funds, and the fact the FPC was aware that investors were likely to withdraw large sums of money in the event of a Brexit vote.

Why didn’t the FPC do anything?

Carney says that markets have created funds with daily liquidity that invest in illiquid assets (i.e. property). He says the FCA were aware and were looking at the issue.

Tyrie now asks Donald Kohn about a Republican party report in the US that claims the Department of Justice did not want to see legal proceedings against the HSBC because of risks to financial stability.

Should we be taking this seriously?

Kohn says he has no specific knowledge of this situation.

I wouldn’t pass judgment until I heard the other side of the story.

Tyrie to Carney: “Did you discuss the matter with the chancellor? The allegation here is that UK authorities have been meddling.”

Carney says he was not involved in or aware of any alleged intervention on the HSBC case.

(A reminder of the HSBC files here.)

Reeves says she is still worried about whether there will be a reduction in lending.

Carney says that demand, not credit availability, is more likely to wane.

We really want to make it as clear as possible to businesses and individuals that credit should be available for the right ideas, for the right transactions, be it a mortgage or a new business.

Rachel Reeves, Labour MP, says the Bank was right to warn on Brexit risks before she moves on to the issue of counter-cyclical buffers.

Carney says that by relaxing the rules for banks he wanted to “take off the table” concerns about credit supply. “The banks are well capitalised.”

Now Tyrie is asking whether Carney would agree to the publication of records of any discussions the governor had with Osborne on the matter, in order to ease any fears of political bias the public might have.

The governor says that he is prepared to look at how that can be done as long as it is within the public interest.

Tyrie quips that lead Brexiteer Boris Johnson has credited Carney with doing a good job since the vote.

Returning to serious mode, Carney says things are different in the current era, much more transparent.

We don’t keep things under wraps.

David Kohn, an external member of the Bank’s Financial Policy Committee, says the committee were in agreement on Brexit risks, and that there was no pressure on policymaker to take one view or another.

We looked at the potential risks that might emerge from a leave vote. All of us agreed it was the biggest near term risk to financial stability

The statement we put out at the end of March was a consensus opinion.

Tyrie says he wants to address the allegation in the run-up to the referendum that the Bank attempted to scare voters about Brexit for political motives.

Tyrie runs through the allegations, made by various politicians on the Leave side of the campaign. They claimed the governor was working in the interests of David Cameron and George Osborne, calling into question the independence of the Bank of England.

Tyrie:

That’s a very serious allegation.

Andrew Tyrie, chairman of the Treasury Committee, makes the point that this is a significant moment, as it is the first opportunity for MP’s to quiz the governor since the Brexit vote.

Here we go. The governor and Bank colleagues take their seats.

The Treasury Committee is late starting, we will be bringing you updates once it’s underway...

The full story on the FPC minutes from the Guardian’s Jill Treanor:

Quick note before the governor starts...

This from Jasper Lawler of CMC Markets on the relief among investors...

The confirmation of a new UK Prime Minister has offered some welcome certainty in uncertain times. Theresa May as PM has produced no Mayday calls in markets.

The “safe hands” of Mrs May at the helm has actually reduced distress signals. The pound has risen over 1% against the dollar today, adding to yesterday’s gains when Andrea Leadsom ended her campaign to become the Tory party leader.

The certainty of Theresa May stepping into the top job in UK politics ahead of schedule has had the perhaps unintuitive effect of weighing on UK stocks.

It was the drop in sterling that cushioned the ‘Brexit blow’ because of its positive effect on UK company foreign earnings. Subsequently, the rebound in the pound is weighing on the FTSE 100, notably the big multinationals including Vodafone, GlaxoSmithKline and Diageo.

Next up: Mark Carney appears at the Treasury Select Committee. Will there be fireworks as he faces his adversary Jacob Rees-Mogg, the MP and Brexit supporter ?

The minutes from the Financial Policy Committee also reveal that policymakers were unanimous in the decision to cut banks’ capital requirements following the EU referendum.

Last week the FPC lowered a capital requirement for banks, affording them greater flexibility to absorb potential Brexit-related shocks.

UBS boss warns about potential job moves from the UK following the Brexit vote...

Nintendo shares are up more than 50% in the three trading days since its Pokémon Go game was launched.

Nintendo’s shares rose 12.8% to ¥22,860 in Tokyo on Tuesday, taking total gains in the past three days to 53%.

It means the market value of the company has jumped by £7bn since the latest version of its 21-year-old game was made available on 7 July.

Pokémon Go is the first edition of the game for mobile phones and and lets players face the monsters in the real world using their smartphone cameras.

Figures published overnight showed consumer spending slowed to recession levels in the run up to the EU referendum.

High street and online sales were up 0.2% in June compared with the same month a year earlier according to the survey from the British Retail Consortium and KPMG.

But sales were down 0.5% on a like-for-like basis, which strips out the impact of sales at shops open for less than a year.

Over the second quarter, sales were up 0.5% on the first quarter and 1.2% up on an annual basis.

The BRC said this was the weakest performance since May 2009, when the economy was contracting during its longest and deepest postwar recessions.

Economists have commented that consumers are likely to delay spending on big items while economic uncertainty reigns following the Brexit decision.

Meanwhile the yen hit more than a two-week low against the dollar as investors factored in more monetary stimulus following the the election victory by Japan’s ruling coalition.

The dollar rose 0.8% to 103.64 yen, its strongest since 24 June when the Brexit vote was revealed.