7 Aug 2013
BoE's interest rates conditional on unemployment levels
FXstreet.com (Barcelona) - The Bank of England said today in its Inflation Report, released on a quarterly basis, that it would keep interest rates at historic lows until the unemployment rate drops to 7%.
The report, published for the first time under new BoE governor Mark Carney, indicated that the interest rates would remain at the current 0.5% level “until the margin of slack within the economy has narrowed significantly.” They would be raised only if inflation expectations destabilized or financial stability was threatened.
Mark Carney, who held a press conference immediately after the release of the report, said that the Monetary Policy Committee was prepared to expand the BoE asset purchase program further if needed and most probably would not wind it down before the unemployment rate fell to 7% (currently at 7.8%).
The BoE governor pointed to signs of recovery in the UK economy adding however that there was still a lot to be done, especially to heal the labor market.
The report, published for the first time under new BoE governor Mark Carney, indicated that the interest rates would remain at the current 0.5% level “until the margin of slack within the economy has narrowed significantly.” They would be raised only if inflation expectations destabilized or financial stability was threatened.
Mark Carney, who held a press conference immediately after the release of the report, said that the Monetary Policy Committee was prepared to expand the BoE asset purchase program further if needed and most probably would not wind it down before the unemployment rate fell to 7% (currently at 7.8%).
The BoE governor pointed to signs of recovery in the UK economy adding however that there was still a lot to be done, especially to heal the labor market.