Carney Speech: Inflation is unlikely to return to target without some increase in interest rates

On Thursday, the Bank of England has decided to raise interest rates by 25 bps for the first time in more than a decade. Governor Mark Carney is now delivering his remarks on the policy outlook, with key quotes, via Reuters, found below. 

It isn't where inflation is now, but where it's going that concerns us.

Inflation is unlikely to return to target without some increase in interest rates.

These are not normal times, Brexit will redefine UK relation with largest trade and investment partner.

Domestic inflationary pressures are likely to build.

Time has come to ease our foot off the accelerator.

Interest rate are one of many influences on exchange rate and other asset prices.

Sheer novelty of first increase in bank rate creates some uncertainty about impact, but no reason to expect it to be larger than normal.

Key notes

The Bank of England hikes Bank rate by 0.25% with 7 MPC members backing the move.

The Monetary Policy Committee of the Bank of England decided to increase the Bank rate by 25 basis points to 0.50% with the majority of 7 members of the MPC backing the decision.

EUR/GBP surges to 0.89 handle post-BoE announcement.

The EUR/GBP cross extended its recovery move and surged to fresh weekly tops, around the 0.8900 handle following the highly anticipated BoE decision. 

About Mark Carney 

Mark Carney is Governor of the Bank of England and Chairman of the Monetary Policy Committee, Financial Policy Committee and the Board of the Prudential Regulation Authority. His appointment as Governor was approved by Her Majesty the Queen on 26 November 2012. The Governor joined the Bank on 1 July 2013.