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Carney says Bank of England rate hike not Fed-dependent

Published 2015-10-08, 03:56 p/m
© Reuters. Carney says Bank of England rate hike not Fed-dependent

By Randall Palmer
LIMA, Oct 8 (Reuters) - The Bank of England will not
necessarily wait for a hike from the U.S. Federal Reserve before
it raises interest rates, Governor Mark Carney said on Thursday.
"The exact timing of the Fed move is not decisive for the
timing of the move by the Bank of England," Carney said in a
seminar at the annual meeting of the International Monetary
Fund.
"We will take our responsibilities. We will determine the
timing for the start of the process of monetary policy
normalization."
Carney made the point that in the five rate cycles since
Britain adopted inflation targeting, the Bank of England moved
before the Fed in two of them.
What both central banks share are economies showing domestic
strength in the face of global weakness, and that is "consistent
with the prospect, not the certainty, but the prospect of
limited and gradual increases in interest rates over time," he
said.
Asked if the market was right in determining that the Bank
of England would not raise rates until next year, he said:
"Anybody who states with certainty the timing, is not right,
because there are tactical considerations around the timing."
"What I have said personally...is that I think this decision
comes into sharper relief around the turn of the year," he said.
He added there needed to be more progress - growth above
trend, domestic costs pick up, core inflation pick up - for
there to be conditions potentially to raise interest rates.

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