Bank of England justifies rate hike hintComment on this story
London - Bank of England Governor Mark Carney said on Tuesday that markets had not adjusted enough to strong British economic data, explaining why earlier this month he signalled interest rates could rise sooner than the markets expected.
Carney sent sterling shooting towards a five-year high against the dollar and government bond yields soaring on June 12 when he said in a speech that the first interest rate “could happen sooner than markets currently expect”.
He told British lawmakers on Tuesday the speech was motivated by the fact that market expectations for the first rate hike appeared unmoved by a run of strong economic data.
“We'd like to see the market adjust to the data, just as our opinions are updating. We hadn't seen (that),” said Carney.
Short sterling futures ticked up after Carney's comments to parliament, easing back on expectations for a rate hike by December but still broadly pricing one in. - Reuters