BOE Carney: rate hike comes in Spring 2015
FXBAZOOKA.com - The Bank of England might start to hike interest rates in Spring 2015, although the labour market is still in the process of recovering from crisis, Governor Mark Carney said in a speech in Liverpool on Tuesday.
- The exact rate hike timing will be data-dependent and will not depend on the UK elections (sceduled for May 2015);
- Carney assumed, that the UK economy recovers much faster than expected;
- However, the labor market remains far from being strong;
- Unit labor costs remain below the level needed to meet the BOE CPI target;
- Real wage growth is expected to resume in mid-2015, Carney projects;
- The UK GDP is expected to grow by 3.5% in 2014 and by 3% in 2015;
- Currency union is incompatible with sovereignity of Scotland.
GBP/USD bounced to 1.6155 on the news, but markets are selling the rallies.