Economics
Carney Says Modest Rate Hikes Needed Even as Inflation Cools
- Bank of England voted 7-2 to keep key rate on hold at 0.5%
- Pound sank and investors reduced bets on rate increase in 2018
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Mark Carney said the Bank of England still intends to deliver “modest” tightening after an unexpected economic slowdown derailed an interest-rate hike that investors had anticipated as soon as this month.
The BOE governor spoke after officials kept the key interest rate at 0.5 percent, citing the first-quarter slump, and said inflation will weaken faster than previously thought. While his comments keep the prospect of tighter policy alive, investors sold the pound and reduced their bets on a hike this year.