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Treasury Select Committee - May Inflation Report

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Mark Carney together with fellow MPC members Charlie Bean, David Miles and Ian McCafferty face the House of Commons Treasury Select Committee this morning, where they will be interviewed on the BoE's May Inflation Report.

With the impending release of the Financial Stability Report, Carney is unlikely to be drawn into giving any specifics on the FPC's view of the housing market. However he will almost certainly be asked to give his reasons for initiating a change in market expectations on the timing of the first increase in Bank Rate with his Mansion House speech.

The meeting starts at 9.30am and will be streamed live on Parliament TV at the following link:

http://www.parliamentlive.tv/Main/Player.aspx?meetingId=15601

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The reporting on this suggests to me they are struggling with the spare capacity estimates Or their is major disagreement. The Telegraph has a quote that there is now more labour market slack than expected. Is market reaction that he has turned again?

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The reporting on this suggests to me they are struggling with the spare capacity estimates Or their is major disagreement. The Telegraph has a quote that there is now more labour market slack than expected. Is market reaction that he has turned again?

Carney was fairly non-committal on interest rates, and once again stressed that there was a great deal of uncertainty in the data. Sterling initially sold off down to $1.697, but recovered some of this as the meeting progressed.

He did explain however that the MPC had discussed market expectations for the first rise in Bank Rate and they felt that the probability put on a hike this year was too low. Consequently the comment in his speech had nudged the market more into line with the MPC's own views.

MC seemed a bit uncomfortable today and didn't quite have the same air of confidence that he has shown before. He also seemed very happy for others to handle a number of the questions (I don't think I've ever seen a Treasury Committee meeting on the Inflation Report where the BoE Governor has been so quiet).

Charlie Bean featured much more than normal, although this was maybe because it was his last appearance before the Committee in his capacity as Deputy Governor.

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