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BoE hints at rate rise

Sarah Davidson

June 19, 2014

Committee members expressed surprise that there was little expectation of a rate rise by the end of the year.

The minutes said: “There was a risk that growth would not slow in the second half of the year so that, without a corresponding rise in supply, slack would be absorbed more quickly than had previously been expected.

“In that context, the relatively low probability attached to a Bank rate increase this year implied by some financial market prices was somewhat surprising.”

Mark Carney said last week that a rise “could happen sooner than the markets expect,” yet he added that any policy tightening will be “gradual and limited.”

This is not the first time interest rates have been signposted for a rise before the end of the year, as speaking at myhomemove last month James Knightley, global economist at ING, predicted an increase by November.


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