UK economy will bounce back from weak start to 2018: BoE’s Carney

LONDON (Reuters): Bank of England Governor Mark Carney said on Tuesday he expected Britain’s economy would bounce back from a weak start to the year when it was hit by heavy snowstorms, keeping the prospect of higher interest rates on the table.

Speaking to lawmakers, Carney also denied that the central bank had confused investors and households by not raising interest rates earlier this month, in contrast to what had been widely expected until shortly before the BoE’s meeting in May. “Our view is not that circumstances changed in the first quarter. It’s more likely to have been temporary and idiosyncratic factors that slowed the economy,” he said, echoing comments he made earlier this month.

In February, the BoE said rates were likely to go up sooner and somewhat faster than investors had been expecting, prompting financial markets to price in a rate hike at the central bank’s May meeting as a near-certainty at one point.