BoE Policy Maker Warns Interest Rate Hike Would Hurt Recovery

A leading Bank of England policymaker warned on Thursday that a rise in interest rates risked undermining th erecovery and the cost of credit should remain low until living standards begin to rise.

Paul Fisher, a member of the central bank’s monetary policy committee (MPC), joined Threadneedle Street’s verbal offensive to protect low rates after official figures revealed a dramatic fall in the unemployment rate to 7.1% in November.

Fisher said the central bank was likely to keep rates low despite unemployment nearing a threshold of 7% because unemployment was still “elevated”.

The BoE introduced a policy of forward guidance last year that tied a review of its interest rate policy to a fall in unemployment to 7%. At the time unemployment was 7.8% of the workforce and officials expected the target to be reached in 2016.


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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