Carney: No rate rises until wages rise

HAMISH_MCTAVISH

Interest rates will not rise until people begin to share in the economic recovery, the governor of the Bank of England has said.

Mark Carney said he wants to give "comfort" to homeowners struggling to cope with the cost of living.

He said interest rates will not rise until jobs, wages and household spending reach "sustainable" levels of growth.

He told the Andrew Marr show: "What we're trying to do to the maximum extent possible is to provide the comfort that we are not going to adjust interest rates until jobs, incomes and spending [recover]."

http://www.telegraph.co.uk/news/10642046/Mark-Carney-offers-comfort-to-struggling-homeowners.html

Interesting....

So if rates don't rise until wages are rising, what does that do to the last great hope of the bears that rising rates will cause a crash?

Answers on a postcard....:D

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

Answers on a postcard....:D

There can be no answer to this.
You could have said answers on a postage stamp to save wastage

carslet

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/news/10642046/Mark-Carney-offers-comfort-to-struggling-homeowners.html

Interesting....

So if rates don't rise until wages are rising, what does that do to the last great hope of the bears that rising rates will cause a crash?

Answers on a postcard....:D

If fact no need to send an answer, as there is only one,
and it is NO CRASH. :j

wotsthat

Isn't he slightly off message?

Wage growth could match inflation anytime soon. It certainly has the feeling of near term rather than the long long time Carney has implied so far.

He's setting us for a number of shrill threads reminding us about this promise. Less significantly it may influence people's behaviour in ways the BoE doesn't want to encourage i.e. sitting on cash and waiting for the good times.

wymondham

I'm waiting for him to say 'no rate rise until the moon is in the quadrant of the phoenix'...... why bother to keep saying these things when you know you'll be moving the goalposts next month?

CLAPTON

The usual trigger for increases in interest rates is signs that the economy is over heating.
Over heating usually shows itself in rising wage rates and subsequent rises in prices.

So nothing has changed then?

Bantex_2

It appears what he is saying is "Just get into as much debt as lenders are prepared to allow you to".

Graham_Devon

And when wages rise, we'll have another reason as to why interest rates won't rise until X happens.

MFW_ASAP

Graham_Devon wrote: »

And when wages rise, we'll have another reason as to why interest rates won't rise until X happens.

Perhaps he doesn't want a wave of repossessions, unlike yourself.

When you look back at this recession Devon, will you regret not investing in the stockmarket when it was at its lowest, not buying a house when they were at their lowest, not using the Help to Buy scheme even though you're a perfect candidate and not taking advantage of historically (never to be seen again) low rates?

At every turn you seem to miss out, do you not wonder if you should stop listening to your own advice and instead start listening to other people's?

Bantex_2

MFW_ASAP wrote: »

Perhaps he doesn't want a wave of repossessions, unlike yourself.

Why would there be a wave of reposessions though?

Are their really loads of mortgage payers out there who have commited to levels of borrowing that they can only service with rates at virtually zero?

MFW_ASAP

Bantex wrote: »

Why would there be a wave of reposessions though?

Are their really loads of mortgage payers out there who have commited to levels of borrowing that they can only service with rates at virtually zero?

Oh hey shortchanged, still using this additional username?

To answer your question, I don't think there will be, but the 'crashers' now seem to be hanging all their hopes on interest rate rises crashing the market. Quite why the government and BoE will spend so much time and effort in preventing this occurrence during the recession to then cause it to happen during the recovery is quite beyond me, but then if the crashers were capable of logical thought they wouldn't be in the financial mess they are in - they would simply buy a home and get on with their lives like everyone else.