MNI BRIEF: BOE's Ramsden-Fiscal Clarity Vital For Nov Decision

Bank of England Deputy Governor Dave Ramsden told the Treasury Select Committee that it was "really important" that the BOE's Monetary Policy Committee is given the fiscal arithmetic that will underpin the budget that is planned for Oct 31 in time for the November policy decision.

With the ruling Conservative Party having only completed its leadership race Monday there has been some speculation that the budget could be delayed but Ramsden stressed that the MPC needs to see the details of the planned changes to fiscal policy, and particularly plans to reduce the the Energy Price Guarantee, a cap on prices, to six months from two years previously.

Ramsden said the MPC was already engaged in talks with Treasury officials over changes to fiscal policies and "a particularly important one is what the Energy Price Guarantee will look like," with a more targeted scheme having significant implications for demand and inflation.

Analysts and market expectations have fluctuated around a 100- or 75-basis point November hike as the political drama has unfolded. (See MNI BOE Review - September 2022: 75bp likely in November)