Officials are compiling a new quarterly economic outlook, due to be published next week, and reviewing how to guide expectations after unemployment plunged to within a whisker of the threshold for considering an interest rate increase.
Carney says he is in no rush to end emergency stimulus, and the monetary policy committee (MPC) kept the benchmark rate at 0.5 percent yesterday.
Carney faces the biggest test of his credibility since unveiling the flagship policy six months ago, as he seeks to convince households and businesses that the economy has enough spare capacity to extend almost five years of record-low borrowing costs. Officials stress that
"The strength of the growth story coupled with the robustness of the labour market means that the BoE are likely fighting a losing battle in convincing markets that rate hikes are a distant prospect,"
All 57 economists in a survey predicted that the MPC would keep its key rate unchanged yesterday. The MPC also maintained its bond-purchase programme at £375 billion (R7 trillion), as forecast by all 44 economists in a separate poll. Minutes of the decision showing how officials voted will be published on
When Carney announced the policy in August last year, unemployment stood at 7.8 percent and the BoE projected it would not hit the threshold until 2016.
The shift has forced Carney to emphasise that 7 percent unemployment is a threshold and not a trigger. -
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