BOE Carney Says There is no Timetable for UK Rate Hike

Bank of England Governor Mark Carney said on Tuesday he had no set timetable for raising interest rates and avoided giving his trademark steer on what was likely to happen to borrowing costs against a volatile global economic backdrop.

Carney, making his first speech of 2016 as growth hit a quarter-century low in China while wages rise more slowly at home, said he would only commit to keeping the bank focused on its inflation target.

“That means we’ll do the right thing, at the right time, on rates,” he said.

Britain’s economy has grown strongly over the past two years and last summer Carney said a decision on when to start raising interest rates would probably become clear by about now.

But over the past six months the mood at the BoE has become markedly more cautious and plunging oil prices have kept inflation close to zero, way below the Bank’s 2 percent target.

“The year has turned, and, in my view, the decision proved straightforward – now is not yet the time to raise interest rates,” Carney said, referring to his forecast of July.

Investors expect no hike until 2017 while economists think one will happen in the second half of this year.

via Reuters

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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