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MNI BRIEF: Ending Reserve Remuneration Self Defeating: Vlieghe

(MNI) LONDON
LONDON (MNI)

Ending central bank reserve remuneration when inflation pressure picks up and drives the policy rate higher would be self-defeating, Bank of England Monetary Policy Committee member Gertjan Vlieghe.

Speaking at a King's College event said that if there was persistent inflation pressure the BOE "will tighten monetary policy through some combination of raising interest rates and unwinding some of the QE and if we stop paying interest on reserves while the balance sheet is still very large then we can't do that because we won't be able to raise interest rates" and reserve rates control overnight rates and inflation.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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