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Carney – Not the time for a rate rise

• Posted by currencies in Bank of England, Bremain, Brexit, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Prime Minister, Sterling, UK, Uncategorised
• June 20, 2017
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Sterling fell by almost a full cent against the dollar today after Bank of England governor Mark Carney said now was not the time to raise interest rates, dashing some investors’ hopes that the central bank had shifted in that direction.

Now is not the time to raise interest rates, he said today, warning of weak wage growth and a likely hit to incomes as Britain prepares to leave the European Union.

Carney, speaking to London’s banking community alongside finance minister Philip Hammond a day after Brexit talks started, said that depending on how the talks progress, businesses might soon need to activate contingency plans.

Sterling sank from $1.2758 to a one-week low of $1.2669 after the text of Carney’s postponed Mansion House speech was released.

It also fell over half a percent to a five-day low of 88.02 pence per euro.

Last week, three BoE policymakers of the eight on the Monetary Policy Committee unexpectedly voted to raise interest rates. Carney voted to keep them at a record low 0.25 percent and gave no sign he was in a rush to change his view.