Bank of England Divided on Rate Outlook After MPC Split Decision
Summary and Key Member Comments on Interest Rate Decision
LONDON, July 30 (Reuters) - The Bank of England left interest rates on hold at 3.75% on Thursday after a split 6-3 vote by its Monetary Policy Committee.
Below are key excerpts from comments by individual members of the MPC about their latest decision.
MPC Members Voting to Maintain Bank Rate at 3.75%
Governor Andrew Bailey
"The possibility of repeated resumptions of conflict combined with lower than usual European gas stock levels and a fall in global refining output mean that risks to energy prices lies to the upside."
"There is little evidence yet of second-round effects... although it is too early to take much comfort from that."
"Holding Bank Rate is appropriate as global conditions look to be more uncertain and inflationary, while domestic conditions are on balance more benign as regards the prospects for inflation."
Deputy Governor Sarah Breeden
"While my confidence around the domestic inflationary environment has increased, risks to global prices have shifted to the upside."
"Looking ahead, I will continue to focus on how second-round effects are likely to evolve."
External MPC Member Swati Dhingra
"I continue to see value in waiting for a clearer read on the energy shock in the coming months before deciding whether a change in policy is required"
Deputy Governor Clare Lombardelli
"Policy would need to be adjusted were there to be evidence of risks of significant second-round effects, including from persistently higher energy prices."
Deputy Governor Dave Ramsden
"If they (upside risks to inflation) were to crystallise, a hike in Bank Rate may be warranted. If the risks were to subside and the underlying disinflation process continued, I would consider resuming the cutting cycle."
External MPC Member Alan Taylor
"Keeping Bank Rate on hold, at a higher level now than the pre-conflict implied path, gives insurance for now, before resuming cuts when and if geopolitical uncertainty clears."
MPC Members Voting to Raise Bank Rate to 4%
External MPC Member Megan Greene
“A proactive hike in Bank Rate may reduce the probability that second-round effects kick in.”
External MPC Member Catherine Mann
"The key change in the environment for my decision is the collapse of the U.S-Iran Memorandum of Understanding, the widening of the Middle East conflict and the associated volatility in energy prices."
Chief Economist Huw Pill
"It is appropriate to raise Bank Rate now, thereby cutting through noise in commodity and asset price developments to offer a clear and unambiguous signal of our willingness and ability to address upside risks to inflation"
Additional Information
(Compiled by Yoruk Bahceli, editing by David Milliken
((david.milliken@thomsonreuters.com))
Keywords: BRITAIN BOE/QUOTES