MNI BRIEF: BOE MPC Haskel Would Act Forcefully If Need Be

The Bank of England Monetary Policy Committee ditched its previous guidance that it would act forcefully if need be, but MPC member Jonathan Haskel in his written evidence to lawmakers on the Treasury Select Committee stuck to the previous wording, strongly suggesting that the decision to ditch it was not unanimous.

"Economic theory suggests that uncertainty around the persistence of inflation should be met with more forceful action, and so I shall remain alert to indications that inflation is more persistent than we expected, and act forcefully if necessary," he stated, while also revealing that although he backed a 50 basis point hike in December and February, he had considered a 75bps one at the earlier meeting. Haskel highlighted his continuing concerns, reflected in his reasearch, over the weakness of UK labour supply due to high levels of sickness feeding through to a falling participation rate.

Chief economist Huw Pill told the TSC that he now saw some signs of labour market weakness, but he too held the door open to further tightening, saying that there was no room for complacency and that inflation remained unacceptably high.