UPDATE: BOE Carney: Few Rate Hikes Over Next Few Years: BBC

--adds last paragraph

By David Robinson

     LONDON (MNI) - Bank of England Governor Mark Carney, in a BBC interview,

said that people should anticipate a few hikes in interest rates over the next

few years.

     In the initial comments broadcast by the BBC from an interview with him in

Washington, he said nothing about the likelihood of a May rate hike, although

the BBC reported that he sounded dovish and that the debate over a May increase

was finely balanced.

     "The big picture for people ... is that, yes, prepare for a few interest

rate rises over the next few years," Carney said.

     He cited the importance of the Brexit negotiations for policy setting, but

with a transition period extending out to the end of 2020 and the possibility of

negotiations on a trade deal extending beyond that Brexit will have a drawn out

effect.

     "I think the one other thing we would say is that, look, the biggest set of

economic decisions over the course of the next few years are going to be taken

in the Brexit negotiations, whatever deal we end up with and then we will adjust

to the impact of those decisions," Carney said.

     Markets still see a May rate hike as more likely than not, but the

probability attached to one has diminished following recent soft data. Headline

inflation fell to 2.5% in March, below the Monetary Policy Committee's 2.8%

forecast.

     Carney also said, in a later segment of the BBC interview, that he was

conscious that there were other MPC meetings (than May) to come this year. This

comment has been interpreted by some in the financial markets as leaving him

wriggle room to hold off on a May hike.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: M$B$$$,M$E$$$,MT$$$$,M$$BE$]