In his latest inflation report press conference, Mark Carney, Governor of the Bank of England (BOE), struck a Halloween theme in his opening remarks. Since the last meeting he confirmed that “indicators across much of the advanced and emerging world have been moribund”, adding that “a spectre is now haunting Europe – the spectre of economic stagnation” and “in October financial markets took fright”.
Overall, the growth forecast is slightly lower, 3.5% this year, 2.9% and 2.6% in 2015 and 2016 respectively. Inflation is expected to remain close to 1% over the next year as disinflation persists while there has been some signs of real wage growth.
The central message of their guidance was “When Bank Rate does begin to rise, it is expected to do so only gradually and to remain below average historical levels for some time to come”, providing a level of clarity on interest rates which they believe “is helping businesses and households to focus on their day’s work, building the economic expansion, without being overly troubled by foreign nightmares.”