Bank of England (BoE) Monetary Policy Committee (MPC) member and Deputy Governor for Financial Stability Sarah Breeden noted that it might finally be time for the BoE to start loosening policy rates now that UK economic data has effectively begun to crumble.
Key highlights
There is some tentative evidence that activity is starting to weaken, though we expect it to pick up again.
Important questions as I look ahead are what shocks explains the recent slowdown in activity and how will employers respond to higher employment costs.
Recent evidence further supports the case to withdraw policy restrictiveness.
Inflation has fallen materially in last year.
It is difficult to know how quickly to remove the restrictive policy.
Upside CPI scenarios are no longer core consideration.
I expect the bank rate to come down over time.
Evidence supports gradual removal of restriction.
What is key for the BoE is how the rest of the world reacts to Trump.
The bank rate will be coming down; the question is pace.
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