Carney Might Be Second BOE Governor to Not Raise Rates During Tenure

Mark Carney, meet Thomas Catto.

As Bank of England governor from 1944 to 1949, Catto never changed interest rates the entire time he was in office. The way the outlook is shaping up, Carney may be next to hold that distinction.

Bank of Japan negative interest rates and warnings from the Federal Reserve about the global economy reinforce both a sense of caution among central banks and the prospect that U.K. rates aren’t moving from 0.5 percent any time soon. Moreover, inflation pressures are so weak that investors have pushed out bets on a full quarter-point increase to the first three months of 2018, shortly before Carney’s term is scheduled to end.

“It’s not impossible that Carney leaves without raising rates,” said Philip Shaw, an economist at Investec Securities in London. “You don’t have to go much further than what the market’s telling you now to see the end of his term coinciding with no hike, though it’s not our central forecast.”

Carney has other options to avoid becoming the next Catto — he hinted in Parliament last week that he may seek to extend his tenure to the full eight years permitted by legislation. When he arrived from the Bank of Canada in July 2013, he said he’d only stay five years.

via SOURCE

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

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