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Now is not the time to raise rates – BOE’s Carney

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Bank of England governor, during his speech on economy, said the bank will do the right thing but now is not the time to raise rates.

    This is a complete U-turn from Carney’s take on rates about 3-4 months back when he stated that rates could rise at the turn of the year.

    Key quotes on rates

    Before raising rates we need above trend growth, faster domestic cost growth and core CPI notably nearer 2% target

    Journey to UK policy normalization is still young and there is no set timetable

    On inflation and exchange rate

    Collapse in oil prices means UK inflation likely to stay very low for longer

    Must be vigilant for signs that low headline inflation is pushing down wage deals

    Strong exchange rate and subdued global price pressures will drag on inflation

    Other Key Quotes

    UK has a tighter fiscal stance and greater exposure to global weakness than the US

    Sees risks of financial contagion from challenges in China and other EM's

    UK's natural rate of unemployment may be lower than previously thought
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