LONDON (Reuters) – The Bank of England is weighing up whether to raise interest rates for the 12th meeting in a row next week as it continues to grapple with an inflation rate that remains above 10%, higher than in any other big, rich economy.
Investors think it is a near-certainty that the BoE will announce a quarter-percentage point increase in Bank Rate, taking it to 4.5%, on May 11. They also see a roughly 50% chance of borrowing costs hitting 5% by August.
Following is a summary of recent comments by members of the Monetary Policy Committee.
MPC MEMBERS WHO VOTED IN MARCH FOR A 25 BASIS-POINT HIKE
ANDREW BAILEY, GOVERNOR
March 27: “We have to be very alert to any signs of persistent inflationary pressures. If they become evident, further monetary tightening would be required. With this in mind, the MPC’s response will be firmly anchored in the emerging evidence.”
BEN BROADBENT, DEPUTY GOVERNOR
April 25: “In the last three months, notwithstanding the release we had last week, there are signs in the official data and also in the surveys of some of that (inflation) pressure starting to come off – not nearly to the extent that we need it to, but some of it just may be beginning to turn.”
DAVE RAMSDEN, DEPUTY GOVERNOR
April 21: “When I look at where inflation is and where it needs to get to, I’m more focused on making sure that (we) stay the course in terms of the monetary policy decisions needed to get inflation back to target.”
JON CUNLIFFE, DEPUTY GOVERNOR
Has not commented on monetary policy in recent months.
HUW PILL, CHIEF ECONOMIST
April 4: “On balance the onus remains on ensuring enough monetary tightening is delivered to ‘see the job through’ and sustainably return inflation to target.”
April 13: “(Flat output) is of course somewhat disappointing from an overall point of view, but I think it is important to recognise that that profile is much better than what we had in the MPC’s forecasts in the second half of last year.”
CATHERINE MANN, EXTERNAL MPC MEMBER
March 24: “We are at a point where we have gotten … quite a way towards what an appropriate tightening is.”
“A key factor for me in agreeing with and also voting (with) the majority for a 25 basis-point increase … was that these forward-looking measures of price expectations … had started to moderate, which is exactly the signal to me that monetary policy is having an effect.”
JONATHAN HASKEL, EXTERNAL MPC MEMBER
Feb. 13: He said the BoE should be “really, really careful” about the risk of high inflation becoming embedded and he would watch data closely in the coming months given the high levels of uncertainty. “What I would prefer to do is make policy with much more attention on the data flow over the next few months.”
MPC MEMBERS WHO VOTED IN MARCH TO STOP RAISING RATES
SILVANA TENREYRO, EXTERNAL MPC MEMBER
April 14: “We need to be patient (to see the effects of past rate increases). We don’t want to get burned. We don’t want to get an ice-cold shower.”
SWATI DHINGRA, EXTERNAL MPC MEMBER
March 8: “In my view, a prudent strategy would hold policy steady amidst growing signs external price pressures are easing, and be prepared to respond to developments in price evolution.”
(Compiled by William Schomberg; editing by David Milliken)
