News Column

Mark Carney expected to hint at an earlier hike in interest rates

August 13, 2014


THE BANK of England is today expected to sketch out plans for an interest rate hike over the next six to nine months, in its quarterly inflation report.

Governor Mark Carney has pin-ned the decision on the strength of Britain's labour market, which has been improving rapidly as unemployment keeps on tumbling.

But he has held off pushing for an interest rate rise immediately, as wages are still rising more slowly than prices, a sign there is still some slack in the market.

Economists have warned this guidance is too vague to measure properly.

"We expect Mark Carney to again emphasise that the decision on policy is very much data dependent, thereby indicating that if we continue to see strong growth numbers and wages respond to the tightening labour market then we could see an interest rate rise as early as November," said economist James Knightley from ING.

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Source: City A.M. (UK)

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