Oil Price Uncertainty Challenges Bank of England's Rate Guidance, Dhingra Says
Bank of England Faces Rate Decision Challenges Amid Energy Price Volatility
Impact of Middle East Conflict on Energy Prices
LONDON, June 5 (Reuters) - The extreme difficulty of knowing how energy prices will change as a result of the conflict in the Middle East makes it very hard to give a steer on the future course of interest rates, Bank of England policymaker Swati Dhingra said on Friday.
Dhingra's Perspective on Interest Rate Decisions
"If you ask me, what's my interest rate decision next month going to look like or in the future, I think that's very hard to say, because the big elephant in the room here is what happens to the energy crisis," she said at an event hosted by University College London.
Recent Voting Record and Policy Stance
Dhingra was part of the 8-1 majority on the BoE's Monetary Policy Committee who voted to keep rates on hold in April, but had voted against the majority to cut rates by a quarter-point to 3.5% in February before the Iran war broke out.
Potential Scenarios for Rate Changes
In minutes of April's meeting, Dhingra said cutting rates would again be appropriate if the conflict in the Middle East was resolved quickly and oil prices fell sharply, but some tightening might be appropriate if the situation worsened.
Market Expectations for Future Rate Moves
Financial markets currently see only a slim chance of a rate rise on June 18 after the BoE's next meeting but see a roughly 80% chance of a quarter-point hike by September.
(Reporting by David Milliken and Suban Abdulla)
