LONDON, July 16 Giving markets clearer guidance
about when interest rates will rise may help the Bank of England
steer a smoother exit from exceptional stimulus measures, a top
policymaker said on Tuesday.
However, Paul Fisher, one of the most dovish members of the
Bank's nine-member Monetary Policy Committee, said an exit might
be several years away and the current debate was about whether
or not to give more help to the economy.
"I should say that all the discussions that we're having at
the moment are more about whether we should be giving forward
guidance and using thresholds, whether we should be giving more
stimulus, rather than discussing what the exit strategy will
be," Fisher told a parliamentary committee on Tuesday.
Fisher acknowledged that selling back to the market much of
the large volume of gilts it bought under its quantitative
easing programme would be a challenge.
"I am reasonably optimistic that we can get this right if we
are clear and transparent about what our intentions are. It's
possible forward guidance may help."
Britain's central bank indicated earlier this month that
markets had got ahead of themselves in pricing in higher rates,
and is debating whether to adopt forward guidance in a more
Mark Carney, who took the helm of the central bank at the
start of the month, adopted a form of forward guidance when he
was governor of the Bank of Canada and is thought to be keen to
adopt the formula here.