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MNI POLICY: Cracks On MPC But Gradualism Holds, Bailey Nuanced

BOE MPC members have set out contrasting views on three scenarios for inflation.

MNI (LONDON) - There is less to an apparent divide between the governor of the Bank of England and his chief economist over the potential pace of future rate cutting than meets the eye, with both tending towards the central view on a cautious Monetary Policy Committee that Bank Rate needs to remain restrictive and only fall gradually over time.

The pound fell after comments by Governor Andrew Bailey in an interview published on Thursday that it could become a “bit more activist” if inflation continues to decline, before recovering some losses the following day as Huw Pill warned against cutting rates “too far or too fast” lest it endanger progress towards its 2% inflation target.

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MNI (LONDON) - There is less to an apparent divide between the governor of the Bank of England and his chief economist over the potential pace of future rate cutting than meets the eye, with both tending towards the central view on a cautious Monetary Policy Committee that Bank Rate needs to remain restrictive and only fall gradually over time.

The pound fell after comments by Governor Andrew Bailey in an interview published on Thursday that it could become a “bit more activist” if inflation continues to decline, before recovering some losses the following day as Huw Pill warned against cutting rates “too far or too fast” lest it endanger progress towards its 2% inflation target.

Keep reading...Show less