Bank of England policy maker David Miles said he’s skeptical that the recent strength of the recovery will translate into a sharp drop in unemployment toward the level that may trigger a rate increase.
Lending through the Bank of England’s flagship credit program rose in the second quarter, led by Lloyds Banking Group Plc and Nationwide Building Society, with banks expecting further expansion through the rest of 2013.
The Bank of England’s inflation goal should be changed to a target range because the central bank’s need to “turn a blind eye” to faster price increases in the current system erodes its credibility, Barclays Capital said.
Bank of England Governor Mark Carney united officials to vote unanimously as Paul Fisher and David Miles dropped their call for more stimulus in favor of a “mixed strategy” involving guidance on the path of interest rates.
Bank of England policy makers will probably hold fire on stimulus today, leaving Governor Mark Carney with an anti-climactic end to his first week after being hired to drive the economy to “escape velocity.”
Bank of England policy makers who voted to hold fire on stimulus yesterday will have more legitimacy to act in a month if Chancellor of the Exchequer George Osborne changes their remit and clears the path for more loosening.