UK Unemployment Improvement Could Give BoE Carney a Black Eye

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.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza