News | Published May 10 2019

Bank of England says more interest rate increases due

Governor of the Bank of England Mark Carney says interest rate increases may become "more frequent" than anticipated if the Bank of England's models are accurate.

At the moment, markets are speculating only one increase in interest rates by 2021.

Speaking at a news conference, Carney said that if Brexit is solved and inflation and growth follow their current trajectory -- which the Bank predicts will be the case -- more increases are likely.

As was predicted last year, the Bank of England maintained interest rates at 0.75 per cent.

Interest rates have stayed at that level since August last year, when they were raised 0.25 per cent.

Carney told cameras at the news conference: "If something like this forecast comes to pass, it will require interest rate increases over that period and it will require more and more frequent interest rate increases than the market currently expects."

For now, though, the Bank is reluctant to shift interest rates until further clarity is achieved regarding Brexit.

At present, the Bank reports a slight boost in the economy, which Carney says shows signs of being related to the practice of stockpiling, as well as due to a good performance in the global economy.

Authored by

Thomas Wilson
Political Editor
May 10 2019

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