BoE's Broadbent says no ur­gency to raise rates

The Pak Banker - - FRONT PAGE -

Bank of Eng­land Deputy Gover­nor Ben Broadbent said he saw no ur­gent need to raise in­ter­est rates, adding to signs from the cen­tral bank that a rate hike is likely only in 2016. The Bank's rate set­ters this week voted 8-1 to keep in­ter­est rates at a record low of 0.5 per­cent, the BoE said on Thurs­day. The re­sult sur­prised some in­vestors who had ex­pected a big- ger split, which would have given a stronger sig­nal that Bri­tain's first rate hike in nearly a decade was com­ing soon.

"As I saw it, I didn't think there was any ur­gency to raise in­ter­est rates right now," Broadbent said in an in­ter­view with BBC ra­dio broad­cast on Fri­day. While wages have risen more quickly in re­cent months, there was not yet much in­fla­tion­ary pres­sure, Broadbent said. The time for a first rate hike was get­ting closer as Bri­tain's eco­nomic re­cov­ery con­tin­ued but the cen­tral bank still be­lieved it was some way off, he said. "We ex­pect to be some way away (from a rate hike)," Broadbent said. "We are clearly closer to the time at which rates may have to go up, but that does not mean we're fix­ing some par­tic­u­lar point in the fu­ture." He said BoE Gover­nor Mark Car­ney had not given an ex­plicit mes­sage about a late-2015 rate hike in a speech last month, con­trary to some media re­ports which in­ter­preted it that way. Car­ney said on July 16 that the de­ci­sion about when to start rais­ing rates "will likely come into sharper re­lief around the turn of this year." Broadbent said on Fri­day it would be foolish to pre-an­nounce when rates would change.

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