Friday, October 9th19.2°C

Carney's Canadian approach in England

Mark Carney is already causing ripples in Britain in his first week as governor of the Bank of England, even though his methods would be considered old hat in Canada.

Eschewing past practice, the British central bank went beyond simply announcing no changes to the 0.5 per cent key interest rate as it also published a statement explaining the reasoning and suggesting rates would remain depressed for some time.

The dovish statement had the effect of boosting equity prices in England and dropping the pound one cent to $1.51 US.

Under the previous governor, Mervyn King, the bank would typically issue no comment when policy was left unchanged.

But instead the central bank gave some indication where matters are heading by declaring that "the implied rise in the expected future path of bank rate was not warranted by the recent developments in the domestic economy."

It also said it would provide an assessment next month to Treasury chief George Osborne on whether the bank should use forward guidance, a tool Carney introduced in Canada in the spring of 2009 to give markets and investors long-term assurance on interest rate expectations.

"It does appear that the committee are already moving towards more communication on their decisions and towards providing forward guidance on monetary policy," said Howard Archer, IHS Global Insight's chief U.K. and European economist.

Alistair Cotton, a senior analyst with Currencies Direct, said any forward guidance on interest rates would be "warmly greeted by homeowners (with variable mortgages) ... who will be in a better position to budget and even forecast the right time to lock in."


The Canadian Press

Read more Business News

Recent Trending

Today's Market
S&P TSX13964.36-14.30
S&P CDNX552.26+5.20
S&P 5002014.89+1.46
CDN Dollar0.7723-0.0001
Natural Gas2.52+0.02

Okanagan Companies
Pacific Safety0.225-0.005
QHR Technologies Inc1.25+0.02
Metalex Ventures0.07+0.02
Russel Metals21.26-0.29
Copper Mountain Mining0.66+0.05
Colorado Resources0.07+0.00
ReliaBrand Inc0.0175+0.0009
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.075-0.005
Decisive Dividend Corp3.25+0.14
Diamcor Mining0.97+0.03



2270159750 Pinehaven Court
10097899 bedrooms
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...


Member of BC Press Council