Why BoE will not follow Fed on interest rate transparency

INTEREST RATES

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The US Fed made a landmark move to increase visibility on the future level of interest rates this week but a similar policy is unlikely to be introduced in the UK any time soon.

The Fed last night issued a statement saying it would provide clarity on where interest rates are likely to be in a year or more's time, helping businesses and consumers plan their finances accordingly. The plan, designed to help lift the economy, comes at a time when clarity is in short supply, and could well help boost consumer confidence. However, while the US is happy to lay its cards on the table, the Bank of England is unlikely to be minded to do the same. Years ago the idea was discussed in length but governor Mervyn King shot a number of holes in such a strategy. King (p...

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