Bank Of England Is Ready To Boost Stimulus If Necessary

Bank of England governor Mark Carney has said he is willing to crank up stimulus if expectations of higher bank rates begin to impact the economic recovery.

The Bank of England announced forward guidance when it delivered its inflation report earlier this month.

At the time Carney said forward guidance is based on 2.5% consumer prices and 7% unemployment rate.

In today's speech he reiterated:

"The upward move in market expectations of where Bank Rate will head in future could, at the margin, feed into the effective financial conditions facing the real economy. The MPC will be watching those conditions closely. If they tighten, and the recovery seems to be falling short of the strong growth we need, we will consider carefully whether, and how best, to stimulate the recovery further. Our forward guidance was clear that, although we would not reduce the stimulus until the recovery is secure, we would if necessary provide more."

More to come...