FXStreet (Łódź) - BoE governor Mark Carney, who testified before the Treasury Select Committee on Tuesday, presented a dovish stance against expectations of giving more insight on his remarks made earlier this month that rates in the UK could rise earlier than expected.
But Governor Carney only stressed that the timing of the initial hike would be dependent on data and that the pace of interest rate increases was more important. Interest rate increases will be limited and gradual, he signaled.
As far as the situation on the UK labor market is concerned, Carney admitted that wage data had been softer than expected, despite the strong pace of UK job creation. Falling wages suggest more spare capacity than earlier thought, Carney said.
BoE chief also pointed out that the shift from consumption to investment has begun in the UK but that the strength of the pound was not yet matched by improvements in competitiveness.
The USD/GBP fell to the 1.6980 region on the initial comments, before climbing back to 1.699.