Bank Of England's Cunliffe Says Not Right Time To Raise Rates
June 28 2017 - 3:57AM
RTTF2
Bank of England Deputy Governor Jon Cunliffe said Wednesday that
this is not the right time to adjust interest rates, a stance in
accordance with the views of Governor Mark Carney, but different
from the bank's chief economist Andrew Haldane.
In an interview with BBC Radio, Cunliffe said he would wish to
see how inflation evolves, adding that inflation above the 2
percent target is "not a comfortable place" for any member of the
monetary policy committee.
For Cunliffe, it was important to consider how much of the
overshoot was generated domestically, and how much caused by the
fall in the sterling exchange rate.
UK inflation accelerated to a four-year high of 2.9 percent in
May. The central bank has forecast 2.7 percent inflation for this
year.
Further, Cunliffe said he wanted to see whether business
investment and exports could compensate for a consumer
slowdown.
Consumer spending is slowing as households' real income are
squeezed by higher inflation.
"We do have to look at what's happening with domestic inflation
pressures and on the data we have at the moment, gives us a bit of
time to see how this evolves," he added.
Last week, fellow policymaker Haldane signaled favor for a rate
hike. His comment came after Carney said the time is not right to
begin raising interest rates as wage growth remains anaemic.
At the June meeting, the MPC voted 5-3 to keep the record low
interest rate unchanged.
Kristin Forbes, Ian McCafferty and Michael Saunders sought a
quarter point rate hike at the June meeting. They said partial
withdrawal of stimulus will help to moderate inflation
overshoot.
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