Around half of businesses understood Forward Guidance. But only 23% of households apparently took on board the Bank’s central message that rates would remain low for longer.
Like Jim Bowen The Old Lady of Threadneedle Street is showing us what would have happened if the financial markets had taken its “lower for longer” message on interest rates more fully to heart.
If Threadneedle Street thought traders’ expectation of rate rises were “not warranted” in July it’s going to be tricky for the Bank to label expectations of an even more rapid rise warranted now.
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