LONDON (Reuters) - Bank of England Governor Mark Carney was speaking on Thursday after the release of the latest interest rate decision and inflation data.
Below are some of the comments:
INFLATION
"The near-term outlook for inflation is muted, as I said, and it wouldn't be surprising if we have another month or two of negative inflation given the very substantial moves in oil prices and the changes to some of the utility prices as well."
TIMING
"As the UK expansion progresses speculation about the precise timing of the first move in bank rate is increasing. This is understandable and it's another welcome sign of an economy that is returning to normal.
"The likely timing of the first bank rate increase is drawing closer. However the exact timing of the first move cannot be predicted in advance. It will be the product of economic developments and prospects. In short it will be data dependent."
ON END OF YEAR RISE?
"I didn't say rates increase around the year. I said ... that the decision around that comes into sharper relief."
RECENT DATA
"There's a couple of potential interpretations of what has happened. One would be that there are actually congestion effects in the labor market. In other words, as the labor market tightens, and we see that tightness in a number of ways, ... the movements may take times and you may get these sort of blips that are there. We'll learn more about that over time.
"The other thing that does appear to be happening is we are seeing, we may be seeing, this pick up in productivity that's there, and that is very good news for the sustainability of the recovery."
FALL IN INFLATION
"The most striking development in the UK over the past year has been the fall in CPI inflation, which edged back down to zero percent in June.
"Around three quarters of this deviation of inflation from the two percent target reflect unusually low contributions from energy, food and other imported goods prices. The remaining part of the undershoot reflects the past weakness of domestic costs growth in wages in particular."
GLOBAL GROWTH
"Despite steady global growth, UK exports will still be held back by the strength of sterling. Risks to global growth are judged to be skewed moderately to the downside, reflecting risk to activity in the euro area and China. At home private domestic demand is robust and expected to remain so."
PRODUCTIVITY
"In terms of the productivity puzzle we have been disappointed by the length of time it has taken for productivity to pick up in this economy. There are ... a variety of ways we could cut the data and justify why it's taken time without fully explaining it. I think we have been open that we can account for some of it but not all of it.
"I would say we are mildly encouraged to see the most recent data, which does have a pickup in productivity. Now, I just want to be clear what we have done with that, we haven't run to the other side of the boat as a consequence of a few good reports. We have taken about half of that improvement in productivity into the forecasts."
CHINA
"Events in China are important, but they're important first and foremost though from a perspective of global demand... The financial links to China are nowhere near as strong as the scale of that economy would suggest."
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