Bank of England’s Mark Carney says investors too relaxed about pace of possible rate hikes
Bank votes to keep its benchmark rate at 0.75%, citing little immediate risk from waiting for a clearer view of what Britain’s departure from the EU would mean
London — Bank of England (BoE) governor Mark Carney says investors are underestimating how much the central bank could raise interest rates even as it kept borrowing costs on hold on Thursday due to Brexit uncertainty. The BoE said there was little immediate risk from waiting for a clearer view of what Britain’s departure from the EU would mean for the economy and its nine rate-setters all voted to keep its benchmark rate at 0.75%. But Carney made clear his view that investors were too relaxed about the pace at which the BoE could resume its gradual rate increases to ease Britain off the stimulus of low borrowing costs that has been in place for more than a decade. “There are insufficient hikes in the current market curve to be consistent with our remit,” he told reporters. The BoE’s position that higher borrowing costs will be needed in future represents a more hawkish stance than either the US Federal Reserve or the European Central Bank. The BoE upgraded its forecast for growth...
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