MNI: BOE Ramsden: Not In MPC Majority Seeing Hike In Coming Mo

By David Robinson

     LONDON (MNI) - Bank of England Deputy Governor David Ramsden said Tuesday

that he was not part of the majority on the Monetary Policy Committee that

believed a rate hike was likely to be appropriate in coming months.

     Ramsden said that he believed that there was still slack in the UK economy

and that he saw no evidence of second round effects on wages from the fall in

sterling. Ramsden, in his evidence to the Treasury Select Committee, emerged as

more dovish than the majority on the MPC.

     In his written and verbal evidence to the Treasury Select Committee Ramsden

downplayed the impact of sterling's fall on longer term inflation. While it has

driven up headline inflation real earnings have declined by more than expected,

Ramsden said.

     "Measures of domestically generated inflation are consistent with there

being some slack in the economy; they generally remain a little below levels

consistent with the 2% target. Despite continued robust growth in employment

there is no sign of second round effects onto wages from higher recent

inflation," Ramsden said.

     He said that the did not share the majority MPC view that the erosion of

slack and the trade off between growth and above target inflation pointed to the

need for a hike in coming months.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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