IMF: BoE stance appropriate for now

By FXstreet.com | Updated July 28, 2014 AAA

FXStreet (Łódź) - The International Monetary Fund released a report on Monday in which it said that the Bank of England’s monetary policy is appropriate for the current state of the economy, but recommended adjusting the stance in case inflation accelerates.

Although the IMF didn’t see a case for a rate hike in the nearest future, it suggested that the central bank might consider such a move if the risk of a bubble in the housing market persists. It also said that the BoE should start revealing what course it plans to take once it starts tightening policy, in order to prevent turmoil on financial markets.

"With prospects of a rate rise strengthening, the Bank will need to announce soon what the new monetary control framework will be and how the transition to it will be managed," the report said.

The IMF also suggested that the pound was overvalued by 5-10% and that UK banks might need to make additional efforts to boost capital in the medium term.

Nevertheless, the IMF expressed satisfaction with UK’s economic recovery which is sees as much more balanced than a year ago.

You May Also Like

COMPANIES IN THIS ARTICLE
Related Forex Analysis
  1. Forex News

    US Dollar Poised for Further Gains, but Watch Nonfarm Payrolls

  2. Forex News

    British Pound Likely to Lose Further versus US Dollar

  3. Forex News

    British Pound Forecast to Gain versus Yen

  4. Forex News

    GBP/USD recovers from the dip, trades at 50-DMA

  5. Forex News

    GBP/USD falls below 50-DMA – Scotiabank

Trading Center