Bank of England’s Carney Sees Three Rate Hikes over the Next Three Years

Investing.com – Bank of England Governor Mark Carney said Wednesday that interest rates are likely to rise three times in the next three years due to “excess demand” in the UK economy.

In its February inflation report, the BoE said it is likely to raise interest rates earlier and faster than it had expected in November.

Carney said that November’s forecasts were based on a ‘conditioning path’ of two interest rate rises over the forecast period.

In February, the path has moved to three rate rises, because the bank’s new forecasts indicate there will “excess demand” in the UK by the end of the forecast period.

Carney says the public should expect to see wages firming this year, and a return to real wage growth in 2018.

He also said people should expect inflation to remain above the BoE’s 2% target, unless there are “sufficient and timely” increases in interest rates.

The BoE governor added that financial markets have begun to price interest rate expectations “in line with the underlying data”.

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