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Carney May - Time For Rate Hike Moving Closer | IAC Recruit

By Money Market | 14th July 2015

Carney May - Time For Rate Hike Moving Closer | IAC Recruit

This article from money-marketuk.com reaffirms the view that the UK economy is in its strongest position yet since the financial crisis and ready to take an interest rate rise in the not too distant future.........

"The point at which interest rates may begin to rise is moving closer with the performance of the economy, consistent growth above trend, a firming in domestic costs, counter-balanced somewhat by disinflation imported from abroad," Carney told lawmakers in Britain's parliament.Bank of England Governor Mark Carney reiterated on Tuesday that the time for a first British interest rate hike since the financial crisis was getting closer as the country's economic recovery gathers momentum.

Carney has said a first BoE rate hike is getting closer since at least May of last year.

British government bond prices fell after Carney's comment with gilt futures down nearly 20 ticks. Yields on 30-year gilts rose to close to an eight-month peak. Sterling jumped by more than a cent against the U.S. dollar.

Carney also repeated his view that British interest rates would not rise to their levels before the financial crisis.

"I do think there are a variety of factors that mean that the new normal, certainly over the policy horizon over the next three years, is substantially lower than it was previously," he told parliament's Treasury Committee.

"I see no scenario in which they would move towards historic levels."