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BOE: Repeat - Lombardelli FT: "Gradual means we will need to see more evidence"

BOE
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  • BOE Deputy Governor Clare Lombardelli has been interviewed by the FT (published last night at 21:00GMT, full story behind paywall here). However, after she spoke on Monday and testified before the Treasury Select Committee last week (see the Gilt Week Ahead for more on both), there is nothing in this interview to change expectations of her voting intention (we think that she will vote for unchanged Bank Rate in December, but expect that she and the wider MPC will vote for 25bp cuts in February and May).
  • She had already set out that her view was the BOE's "case 2" i.e. gradual cuts are appropriate (the MPR November forecasts were conditioned on case 2) and that she sees balanced risks with negative costs of "case 3" (structural change requiring higher for longer rate) higher than that of the risks of not cutting fast enough.
  • She said in the FT interview that “It depends on what we see in the data. For me, gradual means we will need to see more evidence on this disinflation process continuing before we can continue to ease policy.”
  • The main focus of the FT interview was surrounding the impact of higher US tariffs, which she had already said in recent appearances pose risks to growth in other countries including the UK. However, she gave little specific guidance over the magnitude of any impact - just noting that the MPC would discuss trade developments in future meetings.
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  • BOE Deputy Governor Clare Lombardelli has been interviewed by the FT (published last night at 21:00GMT, full story behind paywall here). However, after she spoke on Monday and testified before the Treasury Select Committee last week (see the Gilt Week Ahead for more on both), there is nothing in this interview to change expectations of her voting intention (we think that she will vote for unchanged Bank Rate in December, but expect that she and the wider MPC will vote for 25bp cuts in February and May).
  • She had already set out that her view was the BOE's "case 2" i.e. gradual cuts are appropriate (the MPR November forecasts were conditioned on case 2) and that she sees balanced risks with negative costs of "case 3" (structural change requiring higher for longer rate) higher than that of the risks of not cutting fast enough.
  • She said in the FT interview that “It depends on what we see in the data. For me, gradual means we will need to see more evidence on this disinflation process continuing before we can continue to ease policy.”
  • The main focus of the FT interview was surrounding the impact of higher US tariffs, which she had already said in recent appearances pose risks to growth in other countries including the UK. However, she gave little specific guidance over the magnitude of any impact - just noting that the MPC would discuss trade developments in future meetings.