Debate Magazine

Mark Carney Says Time Will Never Be Right for Interest Rate Rise.

Posted on the 20 June 2017 by Markwadsworth @Mark_Wadsworth

From The BBC:
The time will never be right for an interest rate rise, Bank of England governor Mark Carney has confirmed in his Mansion House speech for the fourth year running...
Mr Carney said: "From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment [rate rises].
"You see, there's good inflation - house prices, and bad inflation - wage growth. We'd do what we can to stifle the latter, in the unlikely event it ever happens, but we are relaxed about good inflation.
"In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.
"The Brexit negotiations will drag on for a few years, so that gives me a breathing space for the remaining four years of my tenure at The Bank of England. Waiting to see what the long term impacts of Brexit are should tide over my successor for the next few years after that.
"If the worst comes to the worst, we'll admit that inflation is through the roof and savers are losing money, but at that stage our main concern will be young families who might be pushed into negative equity.
"Come on guys, you know how it works."
Following Mr Carney's comments, the pound fell about 0.4% against the dollar to trade at $0.6682.

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