Bank of England's Breeden says rate hikes not needed in June or July, FT reports
Bank of England's Interest Rate Outlook and Stablecoin Regulation
Breeden's Comments on Interest Rate Hikes
May 14 (Reuters) - Bank of England Deputy Governor Sarah Breeden told the Financial Times on Thursday that interest rates did not need to rise in June or July, while leaving open the possibility of future increases.
"You're obviously correct that we can't wait forever, but we don't need to do it in June or July," Breeden said, referring to increase in interest rates, according to the FT.
The Bank of England did not immediately respond to a Reuters request for comment.
Recent Interest Rate Decisions
Last month, the Bank of England left interest rates on hold for the third meeting in a row and policymakers were divided on where borrowing costs are likely to head as it gauges the extent of the inflationary shock from the Iran war.
Impact of Global Events
Breeden told the FT that it was much less likely that the conflict in Iran would lead to second-round effects on the scale seen after Russia invaded Ukraine in 2022.
She said the BOE was "in a good place to be able to watch what's happening in the economy."
"We don't need to rush to act."
Stablecoin Regulation and Industry Feedback
Separately, Breeden also told the FT that the central bank was "looking very hard" at alternatives to its proposed rules to regulate stablecoins, according to the FT.
A stablecoin is a crypto asset designed to maintain a constant value, and is often pegged to fiat currency and backed by traditional assets such as government debt.
Industry Criticism of Proposed Rules
Industry groups had criticised the central bank's proposals that would require stablecoin issuers to hold 40% of assets backing the coins at the central bank as unremunerated deposits, along with suggested limits capping stablecoin holdings at 20,000 pounds ($27,054.00) for individuals and 10 million pounds ($13.53 million) for businesses.
"What we have heard from industry is that the way we have proposed to implement limits is cumbersome operationally for a temporary measure," Breeden told the FT.
"So we are genuinely open to thinking whether there are other ways of achieving our objective."
Additional Information
($1 = 0.7393 pounds)
(Reporting by Ananya Palyekar in Bengaluru; Editing by Clarence Fernandez)
