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12 Sep 2013
BoE Governor Carney reaffirms commitment to 7% unemployment target
FXstreet.com (Barcelona) - Bank of England Governor Mark Carney today testified to the Treasury Select Committee, again reiterating that the central bank would not won’t raise benchmark rates until unemployment falls to 7 percent. He added that he would be prepared to step in with further stimulus should conditions deteriorate.
Lower than expected unemployment figures released yesterday showed that UK joblessness had fallen to 7.7 percent, prompting many to forecast that the 7 percent threshold might be crossed before the BoE’s target of 2016. Carney’s appointment with the Treasury Select Committee comes as some voice their concerns that the Bank of England will be unable to maintain it’s artificially low 0.5 percent base rate through to 2016, with some pricing in a rate hike for late 2014.
Early on in questioning by Andrew Tyrie MP, Carney confirmed that a base rate hike would come before any asset purchase change in the BoE’s QE exit strategy. The UK 10 year gilt yield had fallen by 4 basis points to 2.96 percent as the Treasury Select Committee wound up its questioning of the Governor’s monetary policy, ahead of a sale of GBP3.75bn of government bonds by the Debt Management Office later today.
Lower than expected unemployment figures released yesterday showed that UK joblessness had fallen to 7.7 percent, prompting many to forecast that the 7 percent threshold might be crossed before the BoE’s target of 2016. Carney’s appointment with the Treasury Select Committee comes as some voice their concerns that the Bank of England will be unable to maintain it’s artificially low 0.5 percent base rate through to 2016, with some pricing in a rate hike for late 2014.
Early on in questioning by Andrew Tyrie MP, Carney confirmed that a base rate hike would come before any asset purchase change in the BoE’s QE exit strategy. The UK 10 year gilt yield had fallen by 4 basis points to 2.96 percent as the Treasury Select Committee wound up its questioning of the Governor’s monetary policy, ahead of a sale of GBP3.75bn of government bonds by the Debt Management Office later today.