Mark Carney’s forward guidance has been unsuccessful in convincing the markets that the Bank Rate is likely to remain on hold until 2016. Speeches from other MPC members in the last two days, indicating that a range of views exist within the MPC regarding whether the framework was the best choice, how quickly unemployment is likely to fall to the 7% threshold and how it should respond when that point is reached, seem likely to dilute the effectiveness of the MPC’s new policy further.
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