- Mark Carney, BoE Governor
Speaking to Parliament's Treasury Committee, Mark Carney, BoE Governor, hinted that UK interest rate hike is getting closer, sending the Pound surging versus the US Dollar. The consideration of lifting interest rates from all-time low became possible due to consistent UK economy's growth above the trend. Once the central bank begins normalizing its monetary policy, adjustments of interest rates would be gradual and to a limited extent, Carney added. Yet, rates would not reach the levels seen before the financial crisis.
Meanwhile, Britain's inflation edged back to zero in June amid start of summer sales and ongoing supermarket price war. According to the Office for National Statistics, the stagnation in the UK consumer inflation followed the 0.1% gain in May and was in line with economists' expectations. The core inflation, which excludes volatile components, declined to 0.8%, down from 0.9%, matching the lowest level since March 2001. Bank of England Governor Mark Carney expected inflation to remain low in the short term, accelerating around the turn of the year. The IMF revised downwards its growth outlook for the UK economy. The institution expects the British economy to expand at a 2.4% pace this year down from 2.7% estimated previously. The economy is set to slow to 2.2% in 2016, compared with a 2.3% forecast earlier.
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