Bank of England chief downplays chance of interest rate hike

Mark Carney has outlined his opposition to a rise in interest rates as pressure for an increase builds at the Bank of England.

But Carney, in a speech delayed from last week due to fire in London, played down the chances of any swift move at a time when the hard data on the United Kingdom economy has been worsening.

However, three members dissented in favor of raising the Bank rate, the largest vote for such a move since the central bank last tightened policy in July 2007.

During his Mansion House speech this morning, Carney cited mixed signals on consumer spending and business investment as well as “anaemic wage growth” as his reasons for holding off on a rate rise.

Mr. Carney had been scheduled to deliver his speech Thursday, but the event was postponed as a show of respect to those who died or were left homeless in the Grenfell Tower fire.

Mr. Carney estimated that “leveling up” would reduce the “excess deficits” of the U.S.by one third and the U.K.by one half.

At the Bank’s policy meeting last week, three out of the eight voting members on its Monetary Policy Committee (MPC) unexpectedly voted to raise interest rates this month. “In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to. the reality of Brexit negotiations”.

Similarly, in a speech late in US time on Monday, Chicago Federal Reserve President Charles Evans said it may be worthwhile for the USA central bank to wait until year-end to decide whether to raise rates again.

On Brexit, Hammond said the Conservative Party was committed to keeping taxes as low as possible to encourage growth. He also suggested an “implementation period” would be needed when the United Kingdom left the EU customs union.

The central banker identified the treatment of financial services in the Brexit talks, which started Monday, as an opportunity to put this new approach to trade into operation.

David Davis, the minister in charge of Britain’s European Union exit, said the talks would see the building of a “new, deep and special relationship” with the EU.

Britain is due to leave the European Union by the end of March 2019 following last summer’s referendum vote.