Full text released by the Bank of England now
"Last summer I said that the decision as to when to start raising Bank Rate would likely come into sharper relief around the turn of this year. Well the year has turned, and, in my view, the decision proved straightforward: now is not yet the time to raise interest rates.
This wasn't a surprise to market participants or the wider public. They observed the renewed collapse in oil prices, the volatility in China, and the moderation in growth and wages here at home since the summer and rightly concluded that not enough cumulative progress had been made to warrant tightening monetary policy.
The outlook for monetary policy depends on three things: the MPC's objectives, its strategy, and the UK's economic prospects. Our objective is clear: to return inflation to the target in a way that avoids undue volatility in output and employment."
He also has this to say on why the UK won't be in a rush to follow the US on rate lift-off
"The obvious question is, if the turn of the year heralded the normalisation of bank regulation and macroprudential policy, why not the start of normalisation of monetary policy? After all, the Federal Reserve raised rates in December. Might the 'special relationship' extend to monetary matters?
Of course there is nothing particularly special about foreign central banks' policy rates. What is most important is whether the shocks to which others are responding are similar to those with which the MPC must contend. To my mind, there are some important differences in this regard:ï‚·
First, cost pressures are stronger in the US. American unit costs have increased by 3% in the past year and are growing above historical averages, while unit costs in the UK are currently rising by around half that rate or at a speed notably belowthat consistent with the inflation targetï‚·Second, the UK economy is twice as open as the US and is therefore more exposed to global weakness, dragging on exports
Third, this also means that pass-through of weak global inflation, compounded by exchange rate appreciation, is likely to exert a greater and more persistent drag on UK inflation. Partly as a result, after adjusting for one-off factors, core inflation is firmer in the US than the UK"
Fourth, the stance of fiscal policy differs markedly. The UK is undergoing the largest fiscal consolidation in the OECD, with the structural deficit projected to decline by around 1 percentage point a year on average over the next four years, having fallen only 1/3 percentage point on average over the past three. In contrast, US fiscal policy is expected to loosen notably over next three years.ï‚·
Finally, the Bank of England's control over macroprudential policy reduces the need to use monetary policy to address financial stability considerations"
Read it all here
Live link here but you have the text now and it hasn't pleased the hawks.
GBP in retreat as I type
We'll see if there's any Q&A to have Carney go off track