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By David Robinson
     LONDON (MNI) - Bank of England Deputy Governor David Ramsden said he
subscribed to the majority view on the Monetary Policy Committee that further
gradual increases in Bank Rate will be required if the economy evolves as
expected.
     -In a speech at the Society of Professional Economists Ramsden aligned
himself with the central view underpinning the Bank's August Inflation Report.
     "If the economy continues to evolve as it has done so far, broadly in line
with our August forecast, then further limited and gradual rises in Bank Rate
will be appropriate to return inflation sustainably to the target," he said.
     -He said that wage growth, which the Bank is expecting to pick up, could
disappoint again but this would not take tightening off the table.
     "Given the gradual move into excess demand that we expect, unit labour
costs and inflationary pressure would still pick up as in our August forecast,"
he said.
     -Brexit is the wildcard, with a range of outcomes possible and the Bank
basing its forecasts on a simple average of smooth Brexit outcomes.
     -The bulk of Ramsden's speech was on the BOE's balance sheet, which he did
not expect to shrink to anything like its pre-crisis size, as a mix of greater
caution and regulatory changes lead to financial institutions with much more
substantial central bank reserves.
     Predicting the ultimate size of the Bank's balance sheet was "an open and
difficult question."
     The financial crisis has changed financial institutions' behaviour,
boosting demand for liquid assets and reserves, and this will persist even when
QE begins to unwind, he said.
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$B$$$,M$E$$$,M$$BE$]