This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-26153122
The article has changed 5 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Mark Carney adjusts Bank interest rate policy | Mark Carney adjusts Bank interest rate policy |
| (35 minutes later) | |
| Bank of England governor Mark Carney has overhauled his flagship forward guidance policy on interest rates. | Bank of England governor Mark Carney has overhauled his flagship forward guidance policy on interest rates. |
| The governor said the Bank would look at a wider range of economic indicators when deciding when to raise rates, rather than just unemployment. | The governor said the Bank would look at a wider range of economic indicators when deciding when to raise rates, rather than just unemployment. |
| When rates are raised, he said, they would "only increase gradually". | When rates are raised, he said, they would "only increase gradually". |
| He said the guidance policy "is working", and had reduced uncertainty and encouraged businesses to hire and spend. | He said the guidance policy "is working", and had reduced uncertainty and encouraged businesses to hire and spend. |
| Introducing the Bank's forward guidance policy last August, Mr Carney said that the Bank would not consider raising interest rates from their current low of 0.5% until unemployment had fallen to 7% or below. | Introducing the Bank's forward guidance policy last August, Mr Carney said that the Bank would not consider raising interest rates from their current low of 0.5% until unemployment had fallen to 7% or below. |
| "Forward guidance is working - expected interest rates have remained low even as the economy has recovered strongly, uncertainty about interest rates has fallen, and most importantly, UK businesses have understood the message," the governor said. | |
| But he said the policy needed to be revisited "as a result of exceptionally strong jobs growth". | |
| "The unemployment rate has fallen much faster than anticipated... and is likely to reach 7% by the spring," he said. | "The unemployment rate has fallen much faster than anticipated... and is likely to reach 7% by the spring," he said. |
| The Bank's inflation report said that the "Bank rate may need to remain at low levels for some time to come". | The Bank's inflation report said that the "Bank rate may need to remain at low levels for some time to come". |
| Outlining the Bank's revised forward guidance policy, the governor said the Bank would now be looking at wider range of indicators, including wages and productivity. | Outlining the Bank's revised forward guidance policy, the governor said the Bank would now be looking at wider range of indicators, including wages and productivity. |
| The Bank will be producing forecasts on a range of indicators, and these will be base on market expectations of 2% interest rates by 2017 and a first rise in spring next year. | |
| He said recovery had "gained momentum". | He said recovery had "gained momentum". |
| "Households are saving less and spending more and business investment is likely to gather pace this year". As a result of this improved outlook, the Bank has increased its forecast for growth this year for the UK economy to 3.4% from 2.8%. | |
| However, Mr Carney also warned that the recovery was "neither balanced nor sustainable", and highlighted the fact that economic activity was still below pre-financial crisis levels. He added that productivity growth had been disappointing. |