Bank of England governor fires warning shot to bond markets

Bank of England governor, Mark Carney, fired a warning shot to bond markets yesterday by expressing a more positive outlook for the UK economy saying that investors should not bet too heavily on base interest rates staying at 0.5% through 2016.  Commenting on the recent fall in UK inflation, he said that the bank is minded to look through the current low level being cause by the dramatic fall in oil, the effects of which they believe to be temporary.  He was also of the view that falling oil prices were unambiguously good for the economy; forecasting stronger GDP of 2.9% in 2015 as well as rising real household income and falling unemployment.   The 10-year UK Gilt yield rose as high as 1.71% on the news and the FTSE 100 push on to new highs for the year at 6,880.