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HomeEconomyBank of England must 'stay the course', says deputy governor Ramsden

Bank of England must 'stay the course', says deputy governor Ramsden

David Milliken

LONDON (Reuters) – The Bank of England needs to focus on tightening monetary policy sufficiently to keep inflation in check and ensure an “inflation mentality” does not develop, England Dave Ramsden, the bank’s deputy governor, said in an interview published Friday. In terms of the monetary policy decisions needed to bring inflation back to target, Ramsden said in an interview that will be published in The Times on Saturday.

“[High inflation] is a bigger risk than overtightening,” he added.

Economists polled by Reuters expect the Bank of England to hike rates one more quarter in May to 4.5%, the first rate hike since December The 2021 consecutive rate hike since the 2021 rate hike).

However, in recent months, two Three members voted against further rate hikes, arguing that the economy has yet to feel the effects of past hikes.

Ramsden said he was concerned seven months of double-digit inflation could embed long-term expectations of higher inflation among businesses and the public, which could lead to more persistent inflation.

“We need to make sure that an inflationary mindset doesn’t develop in the economy like we’ve seen before,” he said.

Ramsden, who is in charge of financial markets and banking, said the BoE remained “very vigilant” about market risks following the collapse of Silicon Valley Bank and Credit Suisse. Look at the UK’s deposit insurance system.

“It’s important to learn the lessons of the past few weeks,” he said.

“When something goes wrong, someone has to pay for it. Then it’s a matter of how much you’re paying upfront by funding deposit insurance, and who’s financing it.”



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