A person walks past the Bank of England in London, United Kingdom on October 31, 2021. REUTERS / Tom Nicholson
LONDON, Nov 17 (Reuters) – The Bank of England faces another decision next month whether to become the first of the world’s largest central banks to raise interest rates since the coronavirus pandemic hit the global economy.
The BoE shocked financial markets on November 4th when its policymakers voted 7-2 to keep rates at 0.1% despite saying inflation was headed towards 5%. Continue reading
Many investors had read Governor Andrew Bailey’s earlier comments that a rate hike in November was a done deal.
Since then, data has indicated that the labor market has withstood the end of the government’s vacation program – which the BoE wanted to see before any rate hike – and inflation hit a 10-year high of 4.2% in October. Continue reading
The BoE Monetary Policy Committee will announce its next monetary policy decisions on December 16 and February 3.
MPC MEMBERS ON NOV. 4th
ANDREW BAILEY, GOVERNOR
November 15th, one day before the latest job data: “I am very concerned about the inflation situation … I want to be very clear. It is of course not our aim to have inflation above target.” . When it came to the decision itself, however, in my opinion it was a very tight decision. “
“I think the situation on the labor market looks much more tense.” Continue reading
HUW PILL, CHIEF Economist
November 15: “On the one hand, I acknowledge some of the arguments made by Michael (Saunders) that if we don’t act, there is a risk that inflation will reach a self-sustaining dynamic that we will have to resist on the streets.” . But I also think that if we act too early, we run the risk of undoing part of the recovery that is still fragile in some ways. “
POLITICAL DECISION MAKERS VOTING FOR A PRICE HIGH
DAVE RAMSDEN, DEPUTY GOVERNOR (MARKETS & BANKS)
Nov 5th: “That move in the UK (inflation expectations) above and well above a relatively stable historical average was something I was concerned about.” Continue reading
MICHAEL SAUNDERS, EXTERNAL MPC MEMBER
November 15 “The risk of a delay that is too long is that if interest rates have to go up, they will go up a little faster and possibly a little further … and also that inflation expectations, particularly among households and businesses, could go a little further drift upwards. ” Continue reading
LESS WORRY ABOUT INFLATION THREAT CATHERINE MANN, EXTERNAL MEMBER
November 15: “The ability of companies to pass cost increases one to one on to their prices is questionable … That will dampen the inflation outlook in the medium term.”
SILVANA TENREYRO, EXTERNAL MEMBER
November 5: “Central banks, not just the Bank of England, have to weigh their inflation and real economy targets. I believe that this trade-off requires a cautious -proach.” Continue reading
BEN BROADBENT, DEPUTY GOVERNOR (MONETARY POLICY)
Nov 4th: “We have had a couple of episodes like this, especially after the financial crisis and the sharp fall in sterling when inflation rose to 5 (%) and it was temporary then and I would expect it to be temporary now. “
RECENTLY NOT TALKED ABOUT MONETARY POLICY
JONATHAN HASKEL, EXTERNAL MEMBER
July 19: “Immediately the risk of preventive monetary tightening that slows recovery outweighs the risk of temporary inflation above target. For the foreseeable future, I do not think that tight policies are” the right policy. ”
JON CUNLIFFE, DEPUTY GOVERNOR (FINANCIAL STABILITY)
July 14: “You shouldn’t expect the economy to reopen smoothly. This is not something that you can just close and reopen without bumps … We are seeing a surge in demand seeing some supply shortages that are driving inflation. How persistent is that (is the) clear question … We would expect some of these pressures, and we would expect temporary pressures at this stage. “
Letter from William Schomberg
Our Standards: The Thomson Reuters Trust Principles.