Now is not the time to raise rates – BOE’s Carney

FXStreet (Mumbai) - Bank of England governor, during his speech on economy, said the bank will do the right thing but now is not the time to raise rates.

This is a complete U-turn from Carney’s take on rates about 3-4 months back when he stated that rates could rise at the turn of the year.

Key quotes on rates

Before raising rates we need above trend growth, faster domestic cost growth and core CPI notably nearer 2% target

Journey to UK policy normalization is still young and there is no set timetable

On inflation and exchange rate

Collapse in oil prices means UK inflation likely to stay very low for longer

Must be vigilant for signs that low headline inflation is pushing down wage deals

Strong exchange rate and subdued global price pressures will drag on inflation

Other Key Quotes

UK has a tighter fiscal stance and greater exposure to global weakness than the US

Sees risks of financial contagion from challenges in China and other EM's

UK's natural rate of unemployment may be lower than previously thought