LONDON (Reuters) – The Bank of England raised interest rates on Thursday to 0.75 percent, their highest level since the financial crisis.
People walk past the Bank of England, in London, Britain August 1, 2018. REUTERS/Peter Nicholls
The bank, whose decision was unanimous, signalled it was in no hurry to raise them further with an uncertain Brexit on the horizon.
Below are comments from Bank of England Governor Mark Carney:
RATE HIKE
“With domestically-generated inflation building and the prospect of excess demand in the economy emerging, a modest tightening of monetary policy is now appropriate to return inflation to its 2 percent target, and to keep it there.
(…)
“In this environment an ongoing limited and gradual tightening of monetary policy is likely to be required in order to return inflation sustainably to its target at a conventional horizon.”
UK GROWTH
“UK growth in the second quarter is estimated to rebounded as expected, consistent with the (Monetary Policy Comittees) judgement that the slowdown in the first quarter primarily reflected the weather, not the economic climate.
(…)
“In the MPCs latest expectations, conditioned on the gently rising path of interest rates implied by the market yield curve, UK demand is expected to grow at around its current pace.”
(…)
“The bigger picture, however, remains one of external cost pressures easing, with the peak impact on inflation from the referendum-related fall in sterling now behind us, and domestic inflationary pressures continuing to build as slack is absorbed.”
Reporting by UK bureau, compiled by Elisabeth O'Leary in Edinburgh
Our Standards:The Thomson Reuters Trust Principles.
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