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BoE’s Carney sees signs recovery is starting to broaden

by International Commercial Investment on April 29, 2014

Source: Reuters

Britain’s economic recovery is starting to broaden and there are early signs that it will be sustainable, Bank of England Governor Mark Carney said in comments published ahead of Tuesday’s economic growth data.

Carney, who was visiting Bristol in south-west England on Monday, also said the Monetary Policy Committee was comfortable with the current record-low interest rates, the Bristol Post reported.

“There is every sign that the recovery is starting to broaden out and I would describe our attitude at the moment as prudently optimistic,” said Carney. “We all want the recovery to be sustainable and the early signs are consistent with that. But we need to see real growth in every sector and in the current level of wages.”

The first reading of economic growth for the first three months of this year comes out at 9:30 am (0830 GMT). Economists polled by Reuters expect it to show the economy grew 0.9 percent, compared with 0.7 percent in the fourth quarter.

That would bring Britain’s economy within a whisker of recovering its pre-recession size.

The newspaper cited the BoE governor as saying he believes the economy is now at the stage it was when the recession first struck in 2008.

But Carney, who was in Bristol talking to local businessmen, still pointed to problems in Britain’s jobs market.

“There is still considerable slack in the labour market. The reality is people want to work longer hours and take on more work and until that changes we will not see any changes,” he said. “When we do begin to see increases in interest rates they will be gradual and they will be limited.”

Britain’s unemployment rate fell to a five-year low in the three months to February, and pay growth caught up with inflation for the first time in nearly four years.

International Commercial InvestmentBoE’s Carney sees signs recovery is starting to broaden