Bank of England’s Broadbent: rate signal is no promise

Mark Carney, the governor of the Bank of England, his deputy Ben Broadbent and their executive director for communications Gareth Ramsay, attend the Bank's quarterly Inflation Report, at the Bank of England, in the City of London
Mark Carney, the governor of the Bank of England, his deputy Ben Broadbent and their executive director for communications Gareth Ramsay, attend the Bank's quarterly Inflation Report, at the Bank of England, in the City of London, Britain November 2, 2017.REUTERS/Stefan Rousseau/Pool

November 3, 2017

LONDON (Reuters) – The Bank of England’s signal that it may need to raise interest rates two more times to get inflation back toward the central bank’s target is not a promise, Bank of England Deputy Governor Ben Broadbent said on Friday.

“Given all the other things we assume in our forecasts, many of which will be misses…, we anticipate we will need maybe a couple more rate rises to get inflation back on track while at the same time supporting the economy,” Broadbent told BBC radio.

“That is not a promise, and it never could be a promise. And that is not what the governor said yesterday either.”

Broadbent was responding to a question about the BoE’s previous attempts to signal the likely path for interest rates which were knocked off course by twists and turns in the economy.

The BoE on Thursday raised interest rates for the first time since 2007, before the start of the global financial crisis, but sterling fell sharply as the central bank also said it expected only “very gradual” rate rises ahead.

(Writing by William Schomberg; Editing by Alistair Smout)