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MNI INTERVIEW: Fast Rates Transmission Argues For BOE Caution

(MNI) London
The Resolution Foundation's Simon Pittaway talks about UK monetary policy transmission.

MNI ((MNI) London) - MNI (LONDON) - The bulk of the monetary impact of Bank of England interest rate hikes may already have been felt, meaning that there is less tightening effect still on the way to further damp inflation and arguing for a more cautious approach to policy easing, senior Resolution Foundation and former BOE economist Simon Pittaway told MNI.

The Bank’s August Monetary Policy Report noted that the long end of the gilt market has been more responsive to rate changes than in previous rate cycles, Pittaway said. This may be linked to the decline of defined benefit pension schemes, making demand for gilts more variable.

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MNI ((MNI) London) - MNI (LONDON) - The bulk of the monetary impact of Bank of England interest rate hikes may already have been felt, meaning that there is less tightening effect still on the way to further damp inflation and arguing for a more cautious approach to policy easing, senior Resolution Foundation and former BOE economist Simon Pittaway told MNI.

The Bank’s August Monetary Policy Report noted that the long end of the gilt market has been more responsive to rate changes than in previous rate cycles, Pittaway said. This may be linked to the decline of defined benefit pension schemes, making demand for gilts more variable.

Keep reading...Show less