Bank of England Policymakers Outline Interest Rate Outlook Amid Uncertainty
Monetary Policy Committee Decision and Member Commentary
LONDON, Sept 17 (Reuters) - The Bank of England left interest rates on hold at 3.75% on Thursday after a 6-3 vote among the members of its Monetary Policy Committee.
Below are excerpts from comments made by individual MPC members.
Members Voting to Maintain Bank Rate at 3.75%
VOTED TO MAINTAIN BANK RATE AT 3.75%
Governor Andrew Bailey
"Financial conditions will continue to work to push down on inflation, and holding Bank Rate is appropriate at this meeting. But if the conflict in the Middle East persists for an extended period, as appears to be the case, and the risk of second-round effects emerging increases, it is likely that policy may have to tighten."
Deputy Governor Clare Lombardelli
"The outlook for energy prices is uncertain and could change in the coming weeks, but the case for raising Bank Rate is building the longer the conflict continues without lasting resolution."
Deputy Governor Sarah Breeden
"Material uncertainty is likely to continue, but if risks to the outlook for second-round effects crystallise, it becomes increasingly appropriate for Bank Rate to respond."
Deputy Governor Dave Ramsden
"There do seem to be some tentative indications of a bottoming out in labour market easing, activity continues to be surprisingly resilient, and external pressures may start to push up on food prices.
"So there is more risk that domestically generated price pressures could start to emerge in the near future."
"Whilst the policy stance continues to provide restrictiveness, were upside pressures on the inflation outlook to continue to build, there could be a case for increasing Bank Rate."
External MPC Member Swati Dhingra
"Bank Rate remains materially higher than in peer European economies, financial conditions have tightened rapidly since the conflict began, and domestic demand remains subdued.
"I therefore continue to see value in waiting for a clearer read on the durable scale of the shock over the coming months, including evidence on first-round energy effects and the conditions for 2027 wage and price-setting."
External MPC Member Alan Taylor
"Clearly, any evidence of emergent second-round effects would build the case for tightening.
"Equally, if geopolitical tensions abate and inflation pressures ease, an easing of policy should be in sight.
"The right approach is therefore vigilant, conditional, and disciplined, with the burden of proof resting on clear evidence that second-round effects are en route."
Members Voting to Raise Bank Rate to 4%
VOTED TO RAISE BANK RATE TO 4%
Chief Economist Huw Pill
"A 25-basis point increase in Bank Rate now sends a clear signal of the MPC's commitment to achieving its price stability mandate amidst the fog of geopolitical conflict and data noise."
External MPC Member Megan Greene
"Waiting for definitive evidence of second-round effects before acting would leave policy behind the curve, and we cannot rely on premia to do our work for us.
"I continue to think a risk-management strategy is appropriate."
External MPC Member Catherine Mann
"Since my vote to increase Bank Rate in July, upside risks to inflation have increased as the 'sporadic continuance' of conflict has ratcheted up energy prices well above the baseline from the July Report."
"Raising Bank Rate is a better risk-management strategy when faced with uncertainty about inflation dynamics and second-round effects.
"Doing so avoids a worse outcome whereby inflation becomes embedded, which requires even tighter policy later."
Reporting and Editing
(Reporting by Suban AbdullaEditing by William Schomberg)
