‘No promises’ on interest rates in Bank’s policy

A member of the Bank of England’s Monetary Policy Committee last night delivered a staunch defence of the Bank’s new forward guidance policy.

Ben Broadbent, in a speech to the London Business School, criticised press reports stating that rapidly falling unemployment would “force” the Bank to raise interest rates earlier than it planned.

“There is no promise unconditionally to keep interest rates fixed for a particular length of time” he said. “What we have pledged to do is to examine the case for a withdrawal of monetary stimulus only after a significant fall in unemployment” but also with regard to other factors including inflation.