Pound sterling edges down as Bank of England governor Mark Carney errs on the side of caution
The pound edged down against the euro today after Bank of England governor Mark Carney failed to give any indication that interest rates might climb faster than markets expect.
"The question in my mind is when is the appropriate time for interest rates to increase, and that is strongly consistent with the strength of the domestic economy," Carney told the Treasury Select Committee, an influential group of MPs.
The Bank’s monetary policy committee has said that when rates do start to go up, it will remain cautious on the pace of hikes.
“There is less margin for error given the weight of household debt in this country,” Carney said.
The pound lost about half a cent against the euro – it now sits at €1.4138.
Carney was also joined by fellow monetary policy committee members Kristin Forbes, Andy Haldane and Gertjan Vlieghe.
Haldane maintained his view that the UK economy was slowing, justifying his leaning toward a rate cut.
"I see the balance of risks around UK GDP growth and inflation as skewed materially to the downside, more so than embodied in the November 2015 Inflation Report," Haldane said
Kristen Forbes said the economy was in good condition and said the next move in interest rates would be an upward one.