Two MPC members cautious about rate rise
Two members of the Bank of England’s Monetary Policy Committee have spoken cautiously about the prospect of a rate rise next month.
Bank of England deputy governor Dave Ramsden indicated he is not close to voting for a rate hike because there is little sign of inflation getting out of control, while new MPC member Silvana Tenreyro said she would require more data to vote for a rise on November 2.
Ramsden said: “Despite continued robust growth in employment, there is no sign of second-round effects onto wages from higher recent inflation.”
And Tenreyro, who is an economics professor at the London School of Economics, said: “My view is that we are approaching a tipping point at which it would be necessary or justified to remove some of that stimulus.
“So my position now is that if the data out-turns are consistent with the picture I just described of an outward gap going towards zero, then I’d be minded to vote for a Bank Rate increase in the coming months.
“However that is very contingent on the data.”
The pair were speaking to the Treasury Select Committee.
In response to the comments the pound fell by 0.42% against the dollar to $1.3196.