"We will not take risks with the recovery. We are going to set the path of monetary policy in a way that ensures that we see sustainable growth in jobs and incomes and in spending."
- Mark Carney, BoE Governor
The central bank failed to convince investors once again. Following BoE's Governor's comments the cable bounced back from 1.6599 and rocketed to 1.6661, with the next resistance located at 1.6694.
During the G-20 meeting Mark Carney pointed out that a new phase of his widely-discussed forward guidance is intended to give assurance to market participants that policymakers will support economic growth. The revised guidance reflects the necessity for a more complex set of measures that central bank will monitor to assess economic performance, rather than simply making a link to the unemployment rate. Earlier this month Carney pledged to start raising rates only when a range of measures will point the domestic economy is operating at closer to its full capacity, now focussing on a variety of measures, including growth in the number of jobs, wages and incomes.
While the central bank is brokenly trying to calm down markets, with the MPC saying the rate will remain at a record-low of 0.5% for the foreseeable future, Martin Weale said the first rate hike can be made in the spring of 2015. At the same time, Chief Economist Spencer Dale bets on an increase next year, while also saying the key refinancing rate will stand at 2% by 2016.
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