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Pill on further tightening

BOE
  • "It is not the end of the transition. In my view, we still have some way to go in our monetary policy tightening, in order to make the return of inflation to target secure."
  • "It is the need for a continuation of this transition in monetary policy that led me to support the 25bp hike in Bank Rate at the May MPC meeting. And, even after this hike, I still view that necessary transition as incomplete. Further work needs to be done."
Pill on asset sales:
  • "As long as we undertake any gilt sales programme in a predictable and well-communicated manner, the impact of these sales will be – indeed, already may be – ‘priced into’ financial prices, notably gilt yields. These are observable and are used to condition our regular MPC forecasts and other analysis. Knowing how asset sales have influenced the market, the setting of Bank Rate can then be calibrated in order to achieve the inflation target over the medium term."
  • "In this context, trying to add some quantitative calibration of the impact of asset sales on the economy and price developments directly into our macroeconomic forecasts would amount to double counting."
  • "It would be preferable to have any such gilt sales running ‘in the background’, rather than being responsive to month-to-month data news. That would add to their predictability. And it would also avoid that they are interpreted as offering a signal about the future path of Bank Rate, which as the active tool of monetary policy is first in line to respond to data news."
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  • "It is not the end of the transition. In my view, we still have some way to go in our monetary policy tightening, in order to make the return of inflation to target secure."
  • "It is the need for a continuation of this transition in monetary policy that led me to support the 25bp hike in Bank Rate at the May MPC meeting. And, even after this hike, I still view that necessary transition as incomplete. Further work needs to be done."
Pill on asset sales:
  • "As long as we undertake any gilt sales programme in a predictable and well-communicated manner, the impact of these sales will be – indeed, already may be – ‘priced into’ financial prices, notably gilt yields. These are observable and are used to condition our regular MPC forecasts and other analysis. Knowing how asset sales have influenced the market, the setting of Bank Rate can then be calibrated in order to achieve the inflation target over the medium term."
  • "In this context, trying to add some quantitative calibration of the impact of asset sales on the economy and price developments directly into our macroeconomic forecasts would amount to double counting."
  • "It would be preferable to have any such gilt sales running ‘in the background’, rather than being responsive to month-to-month data news. That would add to their predictability. And it would also avoid that they are interpreted as offering a signal about the future path of Bank Rate, which as the active tool of monetary policy is first in line to respond to data news."