BoE rates stance remains unchanged

Bank of England governor Mark Carney said at the weekend that a slowdown in China’s economy could push down further on inflation but it did not change, for now, the central bank’s position on when and how it might increase interest rates.

Mr Carney, speaking at the annual US central banking conference in Jackson Hole, Wyoming, reiterated his view that the recovery in Britain’s economy “will likely put the decision as to when to start the process of gradual monetary policy normalisation into sharper relief around the turn of this year.”

That comment echoed one he made in mid-July, before global financial markets took a hit in recent days over concerns about the health of China’s economy.

The BoE cut rates to 0.5%, a record low, at the height of the financial crisis in 2009. Although inflation in Britain is almost zero, the bank is likely to start raising rates in the first quarter of next year as wage growth picks up, economists predict.