Carney’s concern over a mixed bag of UK data

Carney’s concern over a mixed bag of UK data

Carney presses pause on market expectations of May rate hike.

Bank of England’s Governor Mark Carney has responded to the three bearish data points out of the UK this week by stating that there are, ‘other meetings this year’ to raise interest rates. A May hike had been priced in as an 85% probability, but Carney’s comments have cast doubt over that possibility..
See Adam’s comments here as Carney’s comments were made.

An article by Reuters drew out some of the most relevant quotes from Carney on the potential path of any rate hikes: 

  • They will look at the mixed data calmly and in the round at their May Monetary meeting
  • Brexit uncertainty has prevented a surge of investment in the UK
  • Productivity not increasing which will limit wage growth
  • Conscious that there are other meetings during the year to raise rates
  • Britain should generally prepare for a few interest rate rises over the next few years

The market clearly took these as very bearish signals for the pound. With inflation, earnings and retail sales all missing this week Carney has taken that as a moment to pause and consider the speed of any coming rate hikes. This is likely to weigh on the pound going into the Monetary Policy meeting in May

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.