Carney said:
“The Monetary Policy Committee’s current guidance makes clear we will set monetary policy to meet the inflation target while using up spare capacity.
“This has implications for the timing, pace and degree of Bank rate increases.There Is already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced.
“It could happen sooner than markets currently expect.”
Carney also issued a warning to the mortgage industry about concerning increases in high loan-to-income mortgages.
He said:
“The increase in house prices in the past year means we can expect the proportion of high loan-to-income mortgages to grow further in the coming year even if the housing market begins to slow.
“This is concerning because a durable expansion requires mortgages to be serviceable over their lifetime not just when interest rates are at record lows.”
