Breeden Drops Tightening Bias, Focuses on How Long Rates Should be Held

Full Breeden speech found here: https://www.bankofengland.co.uk/-/media/boe/files/...

Breeden's speech concludes with "what does this mean for policy?" - and effectively shifts from seeing need of higher rates in Dec, to now focusing on how long rates need to be held at current levels.

She says:

• In December, I judged that domestic risks were skewed to the upside. At that juncture, the question I was focused on was whether there was evidence of more persistent inflationary pressures which might mean we needed to tighten further.
• I have become less concerned that rates might need to be tightened further. Instead my focus, and indeed the focus of many on the MPC, has shifted to thinking about how long rates need to remain at their current level.
• I will look at how pay growth and demand are influencing firms’ pricing decisions, to assess how persistence is evolving in relation to what is embodied within our forecast.