Bank of England: “forward guidance”?
As it was expected, the Bank of England decided to leave its interest rate unchanged at 0.5% and the amount of asset purchases at 375 billion pounds.
Unlike last month, the central bank didn’t issue a long statement. Instead the regulator reaffirmed its intention to improve communication and provide forward guidance.
Analysts believe that Governor Carney will announce new forward guidance for UK monetary policy at the quarterly inflation report due for release on Wednesday, August 7. The guidance is likely to pin future rate rises to specific targets for unemployment in order to try and keep market interest rate expectations low and allow the fragile recovery to become stronger and more sustainable.