MNI BRIEF: BOE Ramsden Could Back Faster Rate Cuts
MNI (LONDON) - Bank of England Deputy Governor Dave Ramsden said Wednesday that the Monetary Policy Committee's central view of inflation picking up above target over the next two years was "plausible" but that he thought it was at least as likely that disinflation continues and he said he would consider faster rate cuts if this happened.
Speaking at Leeds University, Ramsden made clear that he placed weight on the MPC's first economic scenario, of self-sustaining disinflation, and that rather than supporting gradual rate cuts, he could end up backing more rapid easing.
He said the first scenario implied "a scenario in which inflation stays closer to the 2% target throughout the first part of the forecast and falls below 2% more materially later on" and if that materialized "I would consider a less gradual approach to reducing Bank Rate to be warranted." The MPC is expected by markets to move gradually, in line with its guidance, with some 100 bps of cuts over the next year but Ramsden, who has been one of the more dovish members recently, appears to envisage easing at a quicker pace.(see MNI POLICY: BOE Braces For Trump Impact Without Scenarios )