- A gradual and careful approach to withdrawing monetary policy restraint remains appropriate
- The timing and pace of future easing will depend on inflation developments
- Monetary policy is not on a pre-set path
- The risk that recent price rises could feed more inflation has come into sharper focus
- Rates are definitely on a downwards path, neutral rate is still too uncertain to speculate on
- Monetary policy is still restrictive
- There is genuine uncertainty on the path for interest rates
- But I have not changed my view on the overall direction of the rate path
- The uncertainty is more so a question of the period of time it will take instead
- We did not spend time discussing explicitly the risk of a recession
- Our view on activity has changed very little since what we put out in May, it’s about other things
- Will set out my view in more detail at next month’s briefing with the Treasury Select Committee (Lombardelli)
- Food prices expected to keep going up (Lombardelli)
They’re not making a big deal of the fact that the bank rate vote has had to go to two rounds and I would say rightfully so. It was only a case of a difference in view on the extent of rate cuts that caused the split initially (which could’ve made things really weird), but it was five members voting for a rate cut up against four members (Lombardelli being the surprise in this camp) even in the first vote.
Besides that, the comments here allude to the fact that they aren’t in too much of a hurry to keep cutting rates further. And considering the vote split, I would say that puts them well on course to pause in September. But as for November, it would be a separate discussion depending on UK data in the next few months.
This article was written by Justin Low at investinglive.com.