Partly Cloudy

Partly Cloudy

max temp: 22°C

min temp: 14°C

ESTD 1874 Search

Economy: Bank of England governor Mark Carney plays down talk of imminent rate rise

11:28 24 June 2014

Bank of England governor Mark Carney giving evidence to the Commons Treasury Committee at Portcullis House, London.

Bank of England governor Mark Carney giving evidence to the Commons Treasury Committee at Portcullis House, London.

Bank of England Governor Mark Carney today appeared to play down the prospect of imminent interest rate rises.

Giving evidence to the Treasury Select Committee, Mr Carney said there seems to be “more spare capacity in the labour market than we previously had thought”.

Although the recovery is entrenched and business investment is rising, earnings growth is not as strong as expected - reducing concerns over inflation.

The comments follow mounting speculation that interest rate rises could be brought forward, with Mr Carney having warned in his Mansion House speech earlier this month that markets are underestimating how long it would be before they move off the historic low of 0.5%.

The Institute of Directors (IoD) this morning called for the first increase to happen this year, potentially as early as the autumn.

But Mr Carney said: “The best collective judgement of the MPC (the bank’s Monetary Policy Committee), which I share, is that there is additional spare capacity in the labour market that can be absorbed further before we would look to begin to normalise interest rates, in other words raise interest rates.

“We are looking to manage monetary policy to achieve the inflation target in a way that supports a durable expansion.

“In doing so what we are looking to do is use up, make sure the economy absorbs is a better way of putting it, what is wasteful spare capacity, spare capacity concentrated in the labour market.”

Mr Carney added: “We think, and this is the guidance we have given, that that will require the start of normalisation of interest rates, in other words increases in interest rates. The exact timing of that will be driven by the data.

“But the most important aspect of the guidance we are giving is that our view is that the increases in rates over the forecast horizon in our best estimation will be limited and gradual.”

Search hundreds of local jobs at Jobs24

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

12-20 Upper Orwell Street, which could be demolished and regenerated if plans by the East of England Co-op go through

A derelict building in Upper Orwell Street which has been empty for decades could be set for demolition if new plans for the area are approved.

A Claydon hybrid drill in action.

Suffolk-based Claydon Drills, the European market leader in strip seeding technology, has appointed Thurlow Nunn Standen to handle sales and service of Claydon Hybrid drills, TerraStar cultivators and Cambridge Rolls in Suffolk and Norfolk and parts of north Essex and Cambridgeshire.

Save the Duke campaigners.

Local farmers have got behind a bid to save an historic village pub.

The George Inn, Wickham Market

Community leaders are pushing for the compulsory purchase of a fire damaged Suffolk pub to save it from being torn down.

Rob Legge, chief executive of Servest.

Facilities management group Service is to create up to 50 new jobs with the opening of a new customer contact centre at its headquarters near Bury St Edmunds.

HOT JOBS

Show Job Lists

Most read

Most commented

Topic pages

Streetlife

Newsletter Sign Up

Sign up to the following newsletters:

MyDate24 MyPhotos24