MNI BRIEF: BOE Tenreyro Foresees Policy Easing In 2024

Policy easing may be required in 2024 even if Bank Rate were to be held at its current 3% level, Bank of England Monetary Policy Committee member Silvana Tenreyro said Friday.

In a speech at the Society of Professional Economists Tenreyro made clear that rate hikes may already have gone far enough and that policy reversal is, in her view, likely to be needed further down the line. If the economy evolves broadly in line with the MPC's November central projection "I would expect that Bank Rate held at 3% over 2023 would reduce output further below potential ..(and) policy would then have to loosen, perhaps in 2024, to try to prevent inflation falling below target," she said.

She set out alternatives scenarios with higher and lower inflation but even in the upside scenario the MPC "may have to cut rates more aggressively in 2024, once inflation had fallen back." (See MNI POLICY: BOE Points To 4% Peak At Most, Then Rate Cuts)