BoE’s Carney says interest rates could rise sooner than markets expect

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• BoE’s Carney says interest rates could rise sooner than markets expect
• Says BOE rate increases will be gradual, limited
• Supply capacity in UK labor market bigger than expected
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• Sees acute need for vigilance on housing market
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• Financial markets show growing vulnerabilities
• Market benchmark rigging too frequent to be aberration

Comments from BoE head Mark Carney hitting the wires – cable up strongly.

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From his speech (full text here)

There’s already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced.

It could happen sooner than markets currently expect.

But to be clear, the MPC has no pre-set course. The ultimate decision will be data-driven. At this point it is safest to conclude, as the MPC has, that there remains scope for spare capacity to be used up before policy is tightened and that a host of labour market, capacity utilisation and pricing indicators should be watched closely to determine how that slack is evolving.