Carney admits plan to ‘shake up the markets’
In a hawkish mood that caught the industry by surprise, Carney said during his speech that the market had become complacent about the prospect of interest rate rises sooner than expected.
Asked by MP Jesse Norman at the Treasury Select Committee yesterday whether his comments has been deliberately designed to “shake up the markets”, Carney replied, “absolutely”.
“We were concerned that markets were not reacting to a fairly long run of data that had been as expected, if not a little better, and there had not been a change in the prediction for the first rise in interest rates,” he said.
However, he added there would be no specific warning on the date of the first rate rise: “The only guidance that the new Monetary Policy Committee is now giving is around the expected medium-term path of interest rates, not the timing of the first rate rise.”