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Broadbent's speech at first glance: Doesn't sound like an imminent hike

BOE
  • Doesn't sound like he will imminently vote for a hike. And the only Omicron mention in the whole speech was regarding some pacific countries' "zero-covid" policies.
  • Very little market reaction.
  • We await the Q&A.
  • Highlights:
  • "Changes in interest rates take time to work. And if a shock to inflation is gone before monetary policy could do anything to offset it there’s not much point in taking action."
  • "There’s a good chance that this shock too, larger though it is, will have dissipated by the time a policy decision taken now could take effect. Indeed it’s quite possible that, in a couple of years, some of these tradable goods prices will be falling, pulling down on inflation. And even if you took a different view, and thought it was more likely that they’ll still be rising at that point, you would also need to judge the extent to which that would depress domestic demand and spending (especially at a time when, on current plans, tighter fiscal policy will be doing the same). Persistent rises in import prices introduce a trade-off between the MPC’s primary and secondary objectives, complicating the appropriate response to them"
  • "The risks to future inflation from the tight labour market may well be more significant"

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