BoE Carney: Rise in real wage no prerequisite to kick-start hiking cycle

By FXstreet.com | August 17, 2014 AAA

FXStreet (Bali) - Bank of England Governor Mark Carney, in an interview with the Sunday Times over the weekend, said he would not wait for real wages to turn positive before starting a hiking cycle in the UK.

"We have to have the confidence that real wages are going to be growing sustainably (before rates go up). We don't have to wait for the fact of that turn to do so", Carney told the Sunday Times.

Carney also suggested that some additional capital may have t be raised by some UK banks in order to comply with stricter regulator's stress tests demands, although Carney recognized that "substantial progress" was made.

On the economy, Carney said that "wherever the finish line was in the depths of the crisis, we are much more than halfway towards that finish line now."

Carney added that "the expansion is proceeding, momentum is more assured; and the very fact we have had consistent quarters of growth in line with, or slightly better than, our forecasts shows that fact."

Carney also said that the strength in the Sterling would not prevent a hike in rates, noting that "even with such appreciation, inflation gets back to target by the end of the forecast period because slack narrows..."

"Monetary policy is heading in a different direction in at least two of the four, and we will do what we need to do," Carney said.

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