Mark Carney says interest rate hike 'taken off the table'

Jan 24, 2014

BoE governor insists fast-recovering job market won't force the central bank's hand on rates

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THE prospect of an early interest rate rise due to the economic recovery has been "taken off the table", The Times reports. 

Speaking at the World Economic Forum in Davos, Bank of England governor Mark Carney said there was "no immediate need" to increase rates despite sharper than expected fall in unemployment to 7.1 per cent. Carney added that any shift in rates would be gradual, the paper says.

The governor's words were reinforced yesterday by Paul Fisher, the Bank's executive director for markets, who said that there was "no immediate need" to raise interest rates from the record low of 0.5 per cent.

In forward guidance issued by the BoE following Carney's appointment it was suggested that the central bank would consider raising interest rates when unemployment reached seven per cent. But in an interview with the BBC's Newsnight programme last night, the governor said the seven per cent threshold was the point at which the bank would "begin to think" about a rise.

"It's really about overall conditions in the labour market, and that's what affects it," Carney told Newsnight host Jeremy Paxman. "We wouldn't want to detract from that focus... by unnecessarily focusing too much on one indicator."

Asked if it was a "problem" that unemployment was falling so much faster than the central bank had predicted, Carney insisted it was not.

"If our forecast is going to be wrong it's better to be wrong in that direction," he said.

Carney also played down the importance of the increased growth forecast from the International Monetary Fund which has sharply upgraded its projection to 2.4 per cent this year, the BBC says. He pointed out that the recovery of the British economy is "coming off a low base" and it had still not recovered its 2008 levels.

"The worst of the crisis is behind us but the financial system is not functioning as well as it could," he said. "Uncertainty among households and businesses is still preventing investment."

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So his word cannot be considered his bond? Typical of the governing class of this sick little country: in another time they would have been called spivs and charlatans.

His comments about "thinking" about moving the rates is nothing but sophistry and obfuscation: What he really means is that he will continue to use consumer debt to keep him and his coven afloat till they can get out with their ill-gotten gains, or until industry actually starts to make something.
Were the announcements about "improved growth" yesterday supposed to make space for him to go back on his word?

Will the idiots who were very critical of Mervyn King now admit they are idiots...or are they all so dumb they think the current situation is based on a 3 month turn round?

Loans still aren't available for businesses at less than 10%-15% so who exactly is he protecting except the idiots who have overextended themselves with enormous mortgages and personal borrowings and at the same time destroying the value of thrifty savers,what is he going to do when nobody bothers to save anymore,most people I know are blowing their saving whilst they are still worth anything,this is partly responsible for the upturn on the high street,but once it is spent it is gone for ever.