MNI BRIEF: BOE Ramsden Sees Case To Up Pace Of QT

The Bank of England could increase the pace of gilt sales under its quantitative tightening programme, with the early stages of the balance sheet unwind so far encouraging, BOE Deputy Governor Dave Ramsden said.

Ramsden opened the door to doing more than the current GBP80 billion in gilt sales in the 12 months from October, citing the evidence so far on how well the market has functioned with increased supply, the reduced need for caution as the initial learning phase on QT is over and the success of sales of gilts bought to deal with short-term market disruption around the mini-Budget last Autumn.

"Taken together, for me personally, these factors support a carefully considered increase in the pace of reduction in the stock of gilts in the twelve months," he said, adding the need for caution as he still wants QT to be at a gradual and predictatble place and not the primary tool of monetary policy.

Ramsden was guarded on the likely size of the rate hike in August, saying that he would not comment on detailed data since the 50 basis points June hike and adding that they would continue to looks for signs of more persistent inflation pressures and if there is evidence of them "then further tightening in monetary policy would be required."