Home Forex Market News Forex News – Bank of England closer to hiking rates: Carney

Forex News – Bank of England closer to hiking rates: Carney

In a speech on Thursday in Wales, Bank of England Governor Mark Carney said the Bank is getting closer to raising interest rates. Carney mentioned that the UK’s economic outlook was much improved, and a rate rise was only a matter of time. He did however mention that the exact date will depend on economic data.

“The point at which interest rates … begin to normalize is getting closer,” Carney said. “In recent months the judgement about precisely when to raise Bank Rate has become more balanced. While there is always uncertainty about the future, you can expect interest rates to begin to increase.”

Carney said that when interest rates did begin to rise, he expected them to be gradual and to peak below pre-financial crisis levels.

“Headwinds facing the economy are likely to take some time to die down,” Carney remarked. “Demand in our major export markets remains muted. Public balance sheet repair is ongoing. And a highly indebted private sector is likely to be particularly sensitive to changes in interest rates.”

Expectations are for the Bank of England to raise rates early next year, though a minority sees a chance of an increase in November. Two members of the BoE’s Monetary Policy Committee voted for a rate rise this month.

The British pound rallied on Carney’s comments today, moving off a one-week low of 1.6275 to reach 1.6340 by the US session.

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