Carney signals end to forward guidance from Bank

The Governor of the Bank of England has indicated his policy of linking interest rates to unemployment could be scrapped less than six months after its creation.

One of Carney's first moves when taking over the hot seat at the Bank was to introduce an unemployment threshold to give a signal as to when interest rates might start to rise. This forward guidance was welcomed at the time, but yesterday Carney moved in the opposite direction after the sharp drop in the unemployment rate helped build expectations an interest rate rise could come much faster - and even be seen this year. Figures out this week showed unemployment has fallen to 7.1%, only fractionally above the 7% threshold which Carney had previously said was the point at which rates m...