BOE Will Hold Rates for Extended Period: Mann

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Oct. 10 (Bloomberg) –- Rogge Global Partners Head of Economic Research Ranjiv Mann discusses what will likely come out of today’s Bank of England meeting with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Bank of england.

Economists are not expecting any change.

Will he get any update on the forward guidance?

Mark carney is in this great position where he has become governor at a time when the uk government and economy has been picking up steam.

We saw this in the data yesterday in terms of the trade data.

The uk as though facing a number of structural headwinds to the recovery.

The short-term outlook is reasonably favorable, there are questions about whether the uk can grow above that trend next year and i think that is highly unlikely.

Paul fisher at the bank of england says the disconnect between what markets are factoring in for when interest rates rise and what the bank of england says is going to happen does not mean their communications policy were forward guidance has been a failure.

Is there a failure their?

Does the disconnect suggested has failed?

The ecb and the bank of england, we have seen forward guidance has been taken as relatively soft.

We have seen a number of caveats he and put in and that is what has gone the market more nervous.

Potentially you may see an earlier tightening because clearly inflation is already towards the top end of the bank of england's comfort levels and if they pick up steam, does the bank of england start rolling back earlier?

It's pretty clear what we have seen is that mark carney is going to keep pushing us through the emphasis of forward guidance.

Essentially, you may see a shift in the uk as well because there is a real risk that if rates start rising in the uk, mortgage rates start rising, and the early housing recovery will be cut off and that is what you see at least in the short term in the u.s. in terms of what the tapering debate started in mortgage rates started to rise.

The bank of england will clearly want to dampen those expectations.

Do you think they will begin raising rates before the 2016 target?

They will keep the rates on hold for an extended.

Of time.

-- extended period of time.

There is still an output gap there.

We are discerning some signs of improvement but the economy is still running well below potential.

That is clearly not going to be resolved in the short-term.

It will be a nonstandard and another ltr row instead of a cut in the interest rate.

The biggest concern the ecb has, signs of improvement in the euro area economy, this this location and funding rates to small and medium enterprises and the periphery rather than the core.

Interest rates have remained relatively high for those markets and the ecb will be certainly looking to address some of those issues.

Again, the ecb has been slow on the up take because the economic data has been favorable and we expect the ecb will have to come back.

Ran g-v man --

This text has been automatically generated. It may not be 100% accurate.

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