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Mark Carney Announces Interest Rate Plans

Written By On 08/08/2013

The new Bank of England governor has outlined significant guidelines on his future plans for interest rates. Canadian Mark Carney replaced former BOE governor Sir Mervyn King a few weeks ago in June. Mr Carney's performed an admirable job at his former employment as the chief of Canada's central bank.

He said in the statement he delivered that people and businesses

across the UK, can make decisions, whether they are investing or spending, with greater certainty about what is going to happen with interest rates. We need to provide as much clarity and as much certainty about the path of monetary policy.

He states that the BOE will not be looking to increase the rates until unemployment figures go under the seven per cent barrier at least. The interest rates will therefore be staying at half a per cent. At that time they would re-visit the situation regarding interest rates. The figures for the current jobless rates in Britain at present is just under eight per cent.

Mr Carney estimated that this would mean that three quarters of a million new jobs need to be created for this to happen and expects it to take at least thirty six months. Many experts' estimations feel it would more likely be approximately forty eight months.

The statement will bring a smile to many property owners who may have been stressed out about increasing monthly payments as they receive these encouraging comments.

Savers will not feel quite so happy about the governor's plans. This means that they will continue to get very little return for their savings. Others still are cautious and believe the BOE may still decide to raise the rates earlier than predicted. They are concerned that inflation may run to high within the next couple of years and may have no alternative.