BoE chief: interest rates to remain lower for longer
Bank of England chief economist Andrew Haldane says he is “gloomier” on the UK’s economic prospects and expects interest rates to stay lower for longer.
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Speaking at Kenilworth Chamber of Trade breakfast today, Haldane said that recent evidence, such as weaker global growth, greater financial and political risks and failed wage recovery, has changed his view on the economy.
The BoE kept rates at their record lows of 0.5 per cent last week, a trend that has continued for 67 consecutive months.
Haldane stateed that he doesn't believe maintaining low rates will push the inflation rate above the BoE's target of two per cent.
He said:
“Recent evidence, in the UK and globally, has shifted my probability distribution towards the lower tail. Put in rather plainer English, I am gloomier.
“That reflects the markdown in global growth, heightened geopolitical and financial risks and the weak pipeline of inflationary pressures from wages internally and commodity prices externally. Taken together, this implies interest rates could remain lower for longer, certainly than I had expected three months ago, without endangering the inflation target.”
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