The Bank of England governor Mark Carney’s comments during the latest inflation report on Tuesday. Prior to the news conference Sterling was bid on the back of the better than expected employment figures, which had traders predicting that the BoE would raise rates sooner than had been predicted. Under the banks forward guidance, 7% unemployment level had been the threshold, highlighted by Carney as the level that monetary policy would begin to be tightened.
This was thrown in to questions by Carney yesterday as he said that the bank may hold rates at the record low level of 0.5%, even once the 7% unemployment threshold level is met. These comments were unexpected as, the forward guidance, had various knock-out clauses but the unemployment threshold had previously been thought as the target.
Mark Carney did have a positive tone to the banks inflation report, stating that the UK recovery has “taken hold,” with unemployment falling faster than the banks predictions. The good economic data was championed by Prime Minister David Cameron, as he took the opportunity to highlight the Conservative government’s plan is working.
There are now 1.1m more people in work since the election - more proof our long-term plan for Britain is working. pic.twitter.com/oeD1p4J828— David Cameron (@David_Cameron) November 13, 2013