Technical & Fundamental Oil Reports Specialists

Follow us

He marched them up to the top of the hill and…

Published Tuesday, August 19th, 2014

Mark Carney is doing a great job imitating the Grand Old Duke of York. Replace army by the markets and he is leading them up and down the same hill on a regular basis. First an interest rate hike depended on the level of unemployment, then on an undefined measure of spare capacity which was replaced earlier this month by wage cost inflation. Over the weekend he clarified that wage growth did not necessarily have to occur to trigger an increase in interest rates. The perception that wage costs would go up significantly would be good enough.

The Governor’s good intentions have made rather a mockery of forward guidance. The fact is that the timing of the increase in interest rates will be data driven and he has no more idea than anyone else what the next set of data will reveal. Guidance is effectively no more than a statement of preference which should be read as a bias to not increasing interest rates if the data signals are mixed.

to read the rest of the report, please click here 

Posted by David Hufton