"There are a broad range of things we could do, I wouldn't jump to that conclusion … we're trying to get across is that it's all about overall conditions in the labour market. We wouldn't want to detract from that focus by unnecessarily focusing on one indicator.
- Mark Carney, BoE Governor
During the last five trading days the cable soared more than 270 pips, becoming one of the top performers on the back of stronger-than-expected labour report. Even though the MPC minutes showed the central bank will not pull the trigger when the unemployment hits 7%, investors still rushed to buy the Pound in anticipation of even stronger British currency.
In attempt to damp market's speculations the BoE Governor Mark Carney said there is no immediate need to raise borrowing costs right now. He promised the case for a rate hike will be examined in next month's inflationary report; however, he also stressed out the necessity to monitor the labour market in general, not paying attention just to one indicator. Carney also promised changes in the monetary policy will be only incremental in order to not create market's panic. Currently, economists are making their bets on how the BoE will adjust its forward guidance and following Mark Carney's comments it seems the central bank will rather focus on more indicators to leave a room for manoeuvre rather than announcing a new threshold for the unemployment rate. Earlier the central bank projected the indicator to reach the 7% level not earlier than in two years. The Governor warned that productivity remains a major concern, while there are still many people working fewer hours than they wanted to.
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