MNI: BOE Tenreyro: PMIs Support View UK Soft Patch Due Weather

-Tenreyro Sees Recent Activity Backing Bank Optimism: UK Press

By David Robinson

     LONDON (MNI) - The recent activity surveys supported the Bank of England

Monetary Policy Committee's view that the deceleration in growth in the first

quarter appeared to be ephemeral and weather related, MPC member Silvana

Tenreyro said in a media interview.

     In a London Evening Standard profile published Friday, Tenreyro said her

decision to vote for no change to policy in May and June was because she wanted

to wait and see if "the soft patch was due to the weather, and not a sign of

something more fundamental going on with demand."

     She said the purchasing managers indices "on output were positive and

confirm in some sense the assessment that we had in our central forecast that

the soft patch was snow-related."

     Tenreyro refused to be drawn on whether she would vote for a hike in

August, wit h many analysts anticipating that the MPC will sanction a 25 basis

point increase in Bank Rate at that meeting. She stuck to the mantra that she

would watch the data very closely.

     She also warned of the risks of adverse economic effects from any

escalation in the trade war.

     "You will see pressure on inflation together with a negative effect on

output and that, of course, will present a very challenging trade-off for

monetary policy," she said.

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

[TOPICS: M$B$$$,M$E$$$,M$$BE$]