Mark Carney, Governor of the Bank of England on Thursday defended a direction forward, and reaffirmed that tightening will not as long as the economy could not afford it.
The forward direction means that the Central Bank will not increase interest rates until at least the unemployment rate dropped to 7 percent threshold. The World Bank expects unemployment to fall to 7 percent until 2016.
But markets are betting on higher rates sooner than the Bank of England estimates that because of the recent improvement in the economy and unemployment data. Official data showed on Wednesday that the unemployment rate fell to 7.7 percent in three months in July, the lowest level since September to November 2012.
Market participants to understand the conditions that would be necessary for policy makers to consider tightening monetary policy, Carney said "the Treasury Committee in Parliament.
The Imam said the guidance is aimed at reassuring households and businesses that interest rates would rise even makes the economy recovery. He said the forward direction is made more effective, stimulus policy.
It also saw three other policy makers in Parliament today. Paul Fisher said that the unemployment rate will decline only gradually. He is optimistic that the improvement in the growth of activity will be accompanied by a selection of higher productivity.
Furthermore, Fisher supported the introduction of the directive, saying it provides greater clarity for companies and families about the circumstances that will position the current accommodative monetary policy.
David miles said Wednesday it was too early to assume that the forward had failed because it did not lower interest rates in the financial markets.
Ian McCafferty said inflation is likely to fall more slowly than expected and it is concerned about the upside risks.
In the memorandum, said Roger Bootle weridood Vicky in "capital economy" low inflation, a recovery in productivity and some support from tax deductions to claim real wages start to rise again next year. But the recovery is likely to be only gradual recovery of unemployment to some extent the possibility of benefit cuts the Group gather pace.
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