Mark Carney pushed back against the Bank of England publishing a more explicit forecast for interest rates as he defended his current communication tools once again.
The BOE governor was joined in his view by Deputy Governor Dave Ramsden and policy maker Michael Saunders, who both said they were skeptical of the benefits of adopting an approach like the Federal Reserve. Carney said that while the Monetary Policy Committee has actively discussed the issue, he’s not convinced it would be an improvement.
Photographer: Simon Dawson/Bloomberg
“The consensus as a committee, or the majority of the committee, was not in favor,” Carney told lawmakers in London on Tuesday. “There are risks of procrastination once you put a path out there.”
The topic of communications has dominated recent discussion about the BOE after investors were forced to sharply reverse course on expectations for an interest-rate hike this month. The bank left its key rate at 0.5 percent on May 10, but Carney has robustly defended his guidance, saying it’s conditional and well understood by households and businesses.
Among those who favor being more explicit on the path of interest rates is MPC member Gertjan Vlieghe, who also addressed lawmakers on Tuesday. He added that he still expects one or two rate hikes over the next three years. After the BOE left policy unchanged this month, markets put a 47 percent chance of a hike in August.