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MNI BRIEF: Further Hikes If BOE Projections Accurate - Ramsden

(MNI) London

Policymakers should be open about the uncertain economic outlook and the elevated risks to their forecasts, Bank of England Deputy Governor said Friday, but noted that if things evolved as expected he thought that further rate hikes were likely to be needed.

"I am not yet confident that domestically generated inflationary pressures from increased costs and firms’ pricing pressures arestarting to ease," Ramsden told a conference at Kings College, but said he was prepared to back further "forceful" action, which points to hikes of greater than 25 bps, if inflation proves persistent..

Ramsden said his concerns "about the emergence and embedding of an inflationary mentality" had pushed him to vote for a faster pace of tightening than the majority on the MPC and that he was not convinced, in light of labour market supply weakness, that unemployment would rise to the extent that the Bank had forecast.

He also said that he was prepared to consider rate cuts if downside risks materialized.

MNI London Bureau | +44 203-586-2223 | david.robinson@marketnews.com
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MNI London Bureau | +44 203-586-2223 | david.robinson@marketnews.com
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