Bank of England Governor Mark Carney has hinted in an interview with BBC News that an expected interest rate rise next month could be delayed.
Pointing to recent economic figures that were weaker than expected, Mr Carney confirmed that several interest rates rises are likely in the next few years, but added:
“I don't want to get too focused on the precise timing, it is more about the general path.”
He also said that any rate rises would be gradual.
The Financial Times reports that his comments signal a concern at the Bank that financial markets have not been sufficiently scrutinising recent data that suggests an easing of inflationary pressure.
Mr Carney also warned that progress on Brexit talks and the shape of the final deal could have a bearing on policy, adding:
“We will adjust to the impact of those decisions in order to keep the economy on a stable path”.
He added that the general performance of the economy, such as on wages, business confidence and inflation, will also be important factors.
Some of the recent data on the economy had been “softer", such as on retail sales and a more rapid fall in inflation than the Bank forecast in February.
“We have had some mixed data,” he said. It was important to look through short term volatility and consider the overall momentum of the economy.
Following Mr Carney’s comments the pound fell by almost a cent against the dollar, as markets reacted to the idea that interest rate rises may not by imminent as some had believed.
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20th April 2018