The Bank of England (BoE) governor Mark Carney reiterated that the very next move from the central bank has equal chances of getting either way. He said, while the central bank can choose how it achieves the target and weighs on the impact of monetary policy on stable growth, jobs and income, the people of the United Kingdom have chosen the price stability to be the primary objective for the bank. He added one of the key indicators that the central bank would be watching household spending as well as income, mainly because the recent better than expected economic performance has been driven by consumer borrowing, which is sensitive to the level of income.

With inflation gathering pace in the United Kingdom, the financial market should pay attention to Carney. While the central bank might allow some overshooting of its objective, it is likely to hike rates if the level of inflation becomes threatening. According to latest data, inflation came at 1.6 percent in December, up from 1.2 percent in November. This is the highest level since 2014. The retail price index is up 2.5 percent y/y in December. Producer price index input is up 15.8 percent y/y in December, while the output is up 2.7 percent.

We highly recommend watching out for comments from other policymakers at the Bank of England (BoE).