Earlier this year the Bank scrapped their previous system of forward guidance based on employment rate and instead opted for a system of eighteen indicators - one of which is spare capacity in the economy.
Carney declined to comment about market expectations of a rate rise in the next quarter, but suggested the Bank is unlikely to raise interest rates soon.
The Bank’s May inflation report says:
“Although the margin of spare capacity has probably narrowed a little since [February], the Monetary Policy Committee continue to judge that there remains scope to make greater inroads into slack before raising the Bank rate.”
In a press conference, Mark Carney said:
“That slack is evident in the 1.4 million people who are working part-time because they are unable to find full-time work, as well as in an unemployment rate of 6.8 per cent.”
Rate rises still some way off, suggests Carney
Bank of England governor Mark Carney today suggested an interest rate rise could still be some way off.
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