Broadbent: BOE waiting for Recovery to be Secure

Bank of England policy maker Ben Broadbent said officials will only consider an interest-rate increase once the recovery is secure, with inflation unlikely to prompt monetary tightening earlier than they have signaled.

“We want to ensure that this recovery, which is only just beginning in a way, continues and is not choked off by a premature rise in interest rates,” Broadbent said in a television interview on Sky News yesterday.

BOE Governor Mark Carney introduced forward guidance in August, saying policy makers will keep the key interest rate at a record low 0.5 percent at least until unemployment, now at 7.7 percent, drops to 7 percent. While officials forecast that won’t happen before 2016, investors are betting on a rate increase before then as one of the policy’s inflation-linked clauses is triggered or joblessness declines faster than the monetary authority predicts.

Bloomberg

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