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MNI INTERVIEW: BOE Overweights Firms' Easing Price Plans-Weale

(MNI) London

Former BOE MPC member Martin Weale speaks to MNI about inflation and the BOE.

The Bank of England risks placing too much emphasis on surveys showing declines in firms’ expectations for setting prices as it discerns falling inflationary pressures and moves towards monetary easing, former two-term Monetary Policy Committee member Martin Weale told MNI.

Minutes of the MPC’s May meeting placed weight on the Bank’s agents’ business contacts expecting lower pass-through of higher labour costs to prices, but Weale said members would be wise to pay attention to still-elevated gains in wages. (See MNI POLICY: BOE Split Over Measures Of Inflation Persistence)

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The Bank of England risks placing too much emphasis on surveys showing declines in firms’ expectations for setting prices as it discerns falling inflationary pressures and moves towards monetary easing, former two-term Monetary Policy Committee member Martin Weale told MNI.

Minutes of the MPC’s May meeting placed weight on the Bank’s agents’ business contacts expecting lower pass-through of higher labour costs to prices, but Weale said members would be wise to pay attention to still-elevated gains in wages. (See MNI POLICY: BOE Split Over Measures Of Inflation Persistence)

Keep reading...Show less