"We have now had a few days to digest not just the forward guidance mechanism put forward by the new Governor of the Bank of England, Mark Carney, as the Inflation report was delivered on Wednesday last, but also the various markets reaction to the announcement. Without doubt the UK is now stuck in a lacklustre recovery by historical standards and the Bank has been tasked by the Chancellor, its political master to find additional ways to stimulate and foster growth in the economy.
Interest rates have stuck at record low levels for four years, the lowest level of rates since William and Mary reigned. However, despite the unprecedented levels of monetary stimulus, little seemed to be happening to generate growth and therefore new jobs. So in the echelons of power it was felt that something more must be done since uncertainty about the path of central bank stimulus is causing households and businesses alike to hold back from spending."
Rosamunde Price, Chief Investment Strategist, Seven Investment Management
Click here to read more on her initial view on the BoE’s rate guidance.