LIMA, Oct 8 (Reuters) - The Bank of England will not necessarily wait for a hike from the U.S. Federal Reserve before it raises interest rates, Governor Mark Carney said on Thursday.
“The exact timing of the Fed move is not decisive for the timing of the move by the Bank of England,” Carney said in a seminar at the annual meeting of the International Monetary Fund.
“We will take our responsibilities. We will determine the timing for the start of the process of monetary policy normalization.”
Carney made the point that in the five rate cycles since Britain adopted inflation targeting, the Bank of England moved before the Fed in two of them.
What both central banks share are economies showing domestic strength in the face of global weakness, and that is “consistent with the prospect, not the certainty, but the prospect of limited and gradual increases in interest rates over time,” he said.
Asked if the market was right in determining that the Bank of England would not raise rates until next year, he said: “Anybody who states with certainty the timing, is not right, because there are tactical considerations around the timing.”
“What I have said personally...is that I think this decision comes into sharper relief around the turn of the year,” he said.
He added there needed to be more progress - growth above trend, domestic costs pick up, core inflation pick up - for there to be conditions potentially to raise interest rates. (Reporting by Randall Palmer; Editing by Chizu Nomiyama)