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- “It is not the right time now for a rate hike”- Mark Carney, BoE
"It is not the right time now for a rate hike"- Mark Carney, BoE
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Loading...Bank of England (BOE) policymakers that are pushing for an interest rate hike have been wrong for the past eight years and there's no sign of them getting it right now, HSBC's global head of foreign exchange strategy.
The meeting in June, BOE's monetary policy committee resulted in a 5-3 vote in favor holding interest rates at record low levels, with Governor Mark Carney and Chief Economist Andy Haldane supporting the majority.
However, a week later and just 24 hours after Carney argued the state of the economy and ongoing Brexit uncertainty meant borrowing costs should remain unchanged; Haldane broke ranks to put himself at odds with the BOE Governor. The chief economist of Britain's central bank suggested on Wednesday that he would soon be in a position to support a rate rise.
"They have been wrong for eight years about this and now they are going to be right? No, no, falling sterling creates inflation, inflation squeezes real incomes, consumption comes down, imports come down and the current account rectifies itself. It's amazing… financial markets can work," Bloom said.
The BOE's monetary policy committee is at its most divided over interest rates since 2011 and Haldane, previously considered to be one of the most dovish members, has now argued it would be prudent to tighten policy before the end of 2017.
However, departing BOE rate-setter, Kristin Forbes, warned on Thursday that the U.K.'s central bank could no longer justify keeping interest rates at 0.25 percent.
In our view the pound remains under pressure, despite of its recent rise.
Source: Bloomberg Pro Terminal
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