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Carney stands firm on rates, but signals shift on unemployment

by Alex Steger on Jan 24, 2014 at 08:17

Carney stands firm on rates, but signals shift on unemployment

Governor of the Bank of England Mark Carney has said there will be no ‘immediate’ increase in interest rates and hinted that his flagship forward guidance policy would shift its focus away from just unemployment, which fell to 7.1% in December.

According to reports Carney said the Bank would look at ‘overall conditions in the whole labour market’, rather than just unemployment.

He said the British economy was ‘in a different place’ from last summer when he introduced forward guidance, linking interest rates with unemployment, but that any rise in rates would be very gradual.

Carney (pictured) is set to outline his views in full in a speech later today.

Speaking in Newsnight last night Carney said: ‘We’re trying to get across that it’s all about overall conditions in the labour market... We wouldn't want to detract from that focus by unnecessarily focusing on one indicator.’

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