BOE’s Carney Sees Need for Hikes If Economy Performs as Expected

(Bloomberg) -- The Bank of England will need to increase interest rates gradually if the economy performs as policy makers expect, according to Governor Mark Carney.

The comments were written May 21 and published as part of the BOE’s Annual Report on Thursday. Carney added that the BOE’s outlook was based on a smooth Brexit, which is “by no means assured.”

“If the economy continues to perform as the MPC expects, upward pressure on prices is likely to build,” Carney wrote. “That means the Committee is likely to have to raise interest rates further in order to keep inflation at target. Any rises in interest rates are expected to happen at a gradual pace and to a limited extent.”

Also in the report:

• The BOE said its median gender pay gap fell to 23% in 2019, down from 24.6% the previous year. The median gap for Black, Asian and minority ethnic employees increased to 6.7%, from 6.6%
• Governors were awarded a pay increase of 1.25%, well below the current U.K. average of more than 3%. As in previous years, Carney declined the offer
• BOE maintenance staff are set to be offered asbestos awareness training, “as this has been identified as a risk in the work that these teams will carry out in the coming year”

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