Weale cautious on BoE rate cut

Added 18th July 2016

The Bank of England’s Martin Weale has hinted he is not ready to vote for cutting the headline interest rate at the Monetary Policy Committee’s next meeting.

Weale cautious on BoE rate cut

The MPC’s next meeting will also be Weale’s final meeting – as he is being replaced by Michael Saunders, a Citi economist.

Weale said there were no indication that businesses or consumers were “panic-struck” following the Brexit vote, and sterling increased by 0.7% as a result.

"The risks of over-diagnosis of stock market movements are all too clear," he said. 

“In contrast to the experience of 2008, I do not have any sense that either consumers or businesses are panic-struck and… there have been no material signs of financial panic,” said Weale.

During its meeting last week, the MPC said most of the rate setting committee members expected a rate cut at its next meeting in August.

“For there to be a case for easing policy I will need to expect weakness in output to be large enough to more than compensate for any overshoot in inflation on the assumption that policy is unchanged in the near term,” commented Weale.

The Committee will produce a new forecast for the economy in the August Inflation Report, produced on the assumption that the UK leaves the European Union.

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