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Why Carney's "embarassing" forward guidance must change
As the Bank of England gears up to release its latest inflation and growth predictions, Saxo’s Nick Beecroft says what he’ll be looking out for is a comment on the future for forward guidance and maybe even a tweak.
He explains Carney has somewhat of a “good problem”; inflation has finally reached the central bank’s 2 percent goal for the first time since 2009, and the jobless rate stood at 7.1 percent in the three months through November, just above the 7 percent level that Carney has identified as the threshold for considering a rate increase.
Nick says the problem is that they "chose a bad metric", that of the unemployment rate. And we're rapidly approaching that. There's increased pressure to broaden that scope.
01:43 minutes
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