Bank of England’s Rates Messages Are Not a Failure – Shafik

The Bank of England is not wrong-footing investors and households with its various signals on when interest rates might start to rise, a deputy governor at the central bank said on Friday.

Sterling and British government bond yields fell sharply on Thursday after the Bank surprised investors by giving no clear sign about when interest rates might go up for the first time before the financial crisis.

Governor Mark Carney said the Bank would move when the time was right, in contrast with the U.S. Federal Reserve which has shown it might raise U.S. rates next month. Carney had previously said a decision on whether to raise rates would come into sharper focus around the turn of the year.

In an interview on BBC radio on Friday, Deputy Governor Minouche Shafik denied that the Bank’s attempts to give guidance on its plans for interest rates had been a failure.

“I don’t think that’s the case. Isn’t it better that the Bank of England give the public and the markets a sense of what our best collective judgement is of what’s going to happen in the economy than to catch people by surprise?,” Shafik said.

Reuters

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