MNI BRIEF: Further Rate Hikes Can't Be Ruled Out - BOE Haskel
BOE MPC member sees some loosening in labour market, but overall it remains tight 'in an absolute sense'.
The UK labour market appears to be loosening 'somewhat', but the risk of inflation becoming embedded means further rate hikes cannot be ruled out, Bank of England Monetary Policy Committee member Jonathan Haskel said Thursday.
Speaking at a Petersen Institute event in Washington, Haskel said "some indicators suggest that the labour market is loosening somewhat", but overall remains "still very tight in an absolute sense". The vacancies-to-unemployment ratio remains historically very high, as does unit wage growth, he noted.
Haskel also noted that high core inflation and subdued economic activity suggests the supply side of the economy may have deteriorated. With such uncertainty, he said he believed it "prudent to reduce the focus we place on forecasts of the medium-term and put more weight on the near-term data" -- and highlighted that he preferred to lean against the risks of inflation momentum. "As difficult as our current circumstances are, embedded inflation would be worse, he said.
The MPC remains committed to bringing inflation sustainably back to the 2% target and will do that, Haskel said, but admitted that in achieving it, "further increases in Bank rate cannot be ruled out".