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Economists Survey Raises 2021 CPI Forecast To 4.9%

MNI (London)
--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
     "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%
     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:
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