BOE Guv Bailey says market interest rate rise reflects optimism in UK

The remarks sidestep the concern that policy makers in continental Europe and parts of Asia have expressed about rising bond yields as a threat to a recovery.

Bank of England Governor Andrew Bailey said an increase in interest rates in financial markets reflects optimism that the UK economy will bounce back shortly.

“We have seen some increase in interest rates over the last month or so, as have other countries,” Bailey said Monday in an interview on British Broadcasting Corp. (Reuters file photo)

The remarks sidestep the concern that policy makers in continental Europe and parts of Asia have expressed about rising bond yields as a threat to a recovery. It suggests the BOE’s Monetary Policy Committee will maintain its current pace of stimulus when officials announce their next decision on Thursday.

“We have seen some increase in interest rates over the last month or so, as have other countries,” Bailey said Monday in an interview on British Broadcasting Corp. “Today” program on Radio 4. “My assessment so far is that is consistent with the change in the economic outlook.”

Bailey said there’s both upside and downside risks to the economy and that Chancellor of the Exchequer Rishi Sunak’s decision to extend furlough payments is “helpful” because it will reduce the peak of unemployment.