Expectations of a rate rise in the U.K. this year have been dampened by weaker expectations of growth in wages, making a rate hike as early as November less likely.
The bank revised its forecast for wage growth down to -0.25 percent for the year, after figures from the Office for National Statistics (ONS) revealed pay including bonuses for employees in the U.K. was 0.2 percent lower than a year earlier between April and June.
Bank of England Governor Mark Carney said increases in bank rate, when they come are likely to be gradual and limited and MPC expectations on a possible rate rise are “shared by markets.” “The path of bank rates implied implied by market yields and on which this forecast is conditioned, rises by only 15 basis points per quarter and rises only 2.25 percent by the end of the forecast period,” Carney said.
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