Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

BoE's Ramsden favours more rate hikes, but sees potential for cuts

Economy Nov 24, 2022 06:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Bank of England's Deputy Governor for Markets and Banking Dave Ramsden attends the Monetary Policy Report News Conference at The Bank of England, in London, Britain November 3, 2022. REUTERS/Toby Melville/Pool

By David Milliken and Andy Bruce

LONDON (Reuters) -Bank of England Deputy Governor Dave Ramsden backed more interest rate hikes on Thursday, but said he would consider cutting rates if the economy and inflation pressures panned out differently to his expectation.

Ramsden is the latest member of the Monetary Policy Committee to mention the possibility of cutting interest rates at some point, after the BoE earlier this month said market expectations for interest north of 5% were too high.

"Although my bias is towards further tightening, if the economy develops differently to my expectation and persistence in inflation stops being a concern, then I would consider the case for reducing Bank Rate, as appropriate," Ramsden said in a speech at King's College London.

But Ramsden also said he would "continue to vote to respond forcefully" if inflation pressures proved to be more persistent than expected.

He described his approach to setting policy as "watchful and responsive".

Earlier this month, MPC member Silvana Tenreyro said she saw rates on hold this year and then falling in 2024, while another, Swathi Dhingra, has warned that an over-tightening of policy could stoke a deep recession.

A Reuters poll published on Wednesday showed a majority of economists thought the BoE will raise rates again next month to 3.5% from 3.0%, although almost a quarter of them said a bigger rate hike to 3.75% was likely.

The BoE has raised interest rates eight times since December 2021.

Ramsden said the government's budget statement published earlier this month - comprising tax rises and spending restraint - was likely to push down on economic growth and inflation.

"However, the vast majority of these measures do not come into effect until April 2025 so will have very little effect over the MPC's three-year forecast horizon, relative to what was assumed in the November MPC," Ramsden said.

Ramsden said he was "acutely conscious" that the BoE was adding to households' difficulties - but added that the MPC had to take the necessary steps to return inflation to the BoE's 2% target.

Ramsden also added that Britain's international reputation had not yet fully recovered from the financial turmoil unleashed by former finance minister Kwasi Kwarteng's Sept. 23 mini-budget, despite a fall in borrowing costs.

BoE's Ramsden favours more rate hikes, but sees potential for cuts
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
G D
G D Nov 24, 2022 5:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
These people ruined the economy.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email