After hoopla, Carney set for quiet policy debut at Bank of England

Wed Jul 3, 2013 7:01pm EDT
 
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By William Schomberg

LONDON, July 4 (Reuters) - Mark Carney's arrival this week at the Bank of England was hailed as the start of a new era, one in which he would seek to drive Britain's economy out of the doldrums.

But a run of surprisingly positive economic data has prompted some economists to wonder how long it will be before he has to think about ending stimulus rather beefing it up.

This week's first policy meeting under his leadership, which wraps up on Thursday, is unlikely to be a momentous one, in contrast to the hoopla that greeted the Canadian in London.

No changes are expected until August's meeting at the earliest.

That is when Carney could begin to push the central bank to try new ways to achieve "escape velocity" in Britain's recovery, which has just started to show some long-awaited momentum after years of economic stagnation.

Manufacturing and services sector surveys this week capped a run of stronger-than-expected data which has prompted many economists to predict growth in the second quarter could be double the 0.3 percent of the first three months of 2013.

George Buckley at Deutsche Bank said the surveys were close to the level at which, in the past, the central bank has eventually tightened monetary policy.

"It's nothing short of ridiculous how the UK numbers have turned around ahead of Mr Carney's arrival, suggesting he's got very lucky timing," said Neville Hill, an economist at Credit Suisse in London. "The case for the (bank) doing something on Thursday is really pretty limited."   Continued...