Highlights: Bank of England hikes rates for first time in a decade
The Bank of England raised interest rates for the first time in more than 10 years on Thursday and said it expected only "very gradual" further increases over the next three years.
Below are comments from Mark Carney and other members of the Monetary Policy Committee:CARNEY ON THE HIKE:
"The MPC`s primary objective is price stability defined by the government as a 2 percent CPI inflation target. CPI inflation was 3 percent in September and is expected to have risen a little further in October.
"But it isn`t so much where inflation is now but where it is going that concerns us. The MPC must set policy to achieve a sustainable return of inflation to target, that is we must aim to bring inflation back to target and to keep it there once the effects of temporary factors, currently predominantly those caused by the referendum-related fall in sterling, dissipate." CARNEY ON INFLATION:
"With inflation high, slack disappearing and the economy growing at rates above its speed limit, inflation is unlikely to return to the 2 percent target without some increase in interest rates."CARNEY ON BREXIT:
"(The) Brexit-related constraints on investment and labour supply appear to be reinforcing the marked slowdown that has been evident in recent years in the rate at which the economy can grow without generating inflationary pressures."CARNEY ON UNCERTAINTY:
"While the sheer novelty of the first increase in Bank Rate in a decade creates some uncertainty around its impact, there are reasons to expect it to be no larger than usual."CARNEY ON MARKET EXPECTATIONS:
"The MPC continues to expect that any future increases in interest rates would be at a gradual pace and to a limited extent.
"Current market yields, which are used to condition our forecasts, incorporate two further 25 basis point increases over the next three years.
"That gently rising path is consistent with inflation falling back over the next year and approaching the target by the end of the forecast period." BEN BROADBENT ON INCOME SQUEEZE
"The worst part of that (income) squeeze was actually in the early part of this year and right now, if you look at what is happening right now, household incomes in real terms are roughly flat, maybe even edging up slightly, so we think we`re past the worst already."
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.