BOE’s Ramsden: CPI inflation at 7.9% remains much too high

Comments from Bank of England deputy governor for markets and banking, David Ramsden, at the Money Macro and Finance Society. The subject of his speech was quantitative tightening.

  • QET should be thought of as operating in the background
  • Repeats that he would like to increase the pace of gilt stock reduction
  • Inflation has begun to fall significantly but remains much too high
  • If there is evidence of persistent pressures, then further mon pol tightening would be required
  • I am not going to comment on the detail of the data published since the June meeting. The
    August MPC round starts soon and will be completed with our announcement on 3 August.
  • Full speech

Key line:

Taken together, for me personally, these factors support a carefully considered increase in the pace of reduction in the stock of gilts in the twelve months ahead reflecting: the completion of the CBPS unwind; the reduced need for aiming off for learning; and evidence so far on marketing functioning. I emphasise careful –like the MPC I want QT to
set a gradual and predictable pace for unwind and to let it operate in the background, after all.

Overall, there isn’t much to move markets here and GBP/USD remains down 139 pips to 1.2895.

This article was written by Adam Button at www.forexlive.com. Source