The Bank of England (BoE) policymaker Alan Taylor said on Wednesday that the BoE should move quickly to cut interest rates “pre-emptively” as the UK is “in the last half mile on inflation.”
Key quotes
“Right now, I think it makes sense to cut rates pre-emptively to take out a little insurance against this change in the balance of risks, given that our policy rate is still far above neutral and would still remain very restrictive.”
“We are in the last half mile on inflation, but with the economy weakening, it’s time to get interest rates back toward normal to sustain a soft landing.”
“It is this logic that convinced me to vote for an interest rate cut in December.”
“On multiple fronts, UK businesses and households could face a near-term cashflow squeeze, and we need to keep a careful eye on this important potential downside trigger.”
“I fully appreciate these challenges for businesses and households and the headwinds they pose for the UK economic outlook, together with all the other emerging downside economic risks in the UK and around the world.”
Market reaction
The GBP/USD pair is trading 0.03% lower on the day at 1.2239, as of writing.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australi
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