Mark Carney’s justification for keeping the Bank of England’s benchmark interest rate at a record low has the backing of economists, according to a Bloomberg survey.
Sixty-seven percent of 33 respondents said there’s still enough slack in the economy to justify holding the key rate at 0.5 percent, where it’s been since March 2009. The BOE has put spare capacity at about 1 percent to 1.5 percent of gross domestic product.
As Carney prepares to publish new forecasts in two days and update investors on his views, the level of slack remains a pivotal issue. Conflicting signals from wage and employment data are dividing the Monetary Policy Committee over how the pickup in the economy will feed through to inflation and when rate increases need to start.