Thursday, September 5, 2013
King left at the right time
Both Government borrowing costs and sterling spiked after the Bank held rates at 0.5pc and maintained the Â£375bn quantitative easing (QE) programme, and decided against issuing a statement to try to bring markets into line. It was the first time since Mark Carney took over as Governor in July that the announcement was not accompanied by a broader comment, despite the challenge posed to his credibility by the marketsâ€™ bet against â€œforward guidanceâ€ over the past month. While the Bank signalled that there would no move in rates until late 2016, markets now believe the first rate rise will come in mid-2015 in light of the UKâ€™s rapidly improving economic prospects.