Hailed as the savior of the U.K. economy when appointed nine months ago, Bank of England Governor Mark Carney is facing growing skepticism just seven weeks after taking up office.
Doubts are growing about Carney’s signature policy — guiding markets to expect rock-bottom interest rates for the foreseeable future — given a rapid improvement in the economy’s fortunes in the months between his appointment and first major policy initiative last week.
Earlier this month, Carney assured investors that the bank would not raise interest rates until U.K. unemployment fell to 7%, a level that it forecast would not be seen for three years.
But the forecast is looking less and less sustainable with each positive economic report.
While investors were initially excited about the guidance and home buyers were thrilled at the promise of cheap borrowing for a sustained period, markets expect official interest rates to rise much sooner than the bank predicts.
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