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BoE Not To Raise Rates Until Slack Is Reduced, Carney Says

The Bank of England will hike interest rate only when slack in the economy is used up, Governor Mark Carney said in an interview with the BBC.

"The path of monetary policy, the path of interest rates is going to be calibrated very carefully to ensure that only when we see sustainable growth in jobs, in incomes and in spending, will we make adjustments," he told the BBC's Andrew Marr.

In the quarterly Inflation Report, released last week, the BoE's Monetary Policy Committee suggested that the interest rate is set to rise only in the second quarter of 2015. For a sustained recovery, stimulus should to be exceptional for some time, the observed.

Carney said he is conscious of boom and bust in the U.K. housing market. The bank will state clearly and publicly if it became uncomfortable with the Help to Buy scheme, he added.

Further, he noted that the recent recovery has been driven by consumer demand. "What we haven't seen yet is business investment picking up."

The key to sustain economic recovery is going to be around business investment, Carney noted.

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