LONDON (MNI) – Ben Broadbent, Bank of England for Monetary Policy, said Friday that the UK economy is better placed for an interest rate rise and that there may be the possibility for rates to increase a little.
However, Broadbent offered no timescale, other than in the Bank’s forecast horizon.
Appearing on BBC Radio, Broadbent asked whether the economy was better placed for a rate hike, said “a little bit”.
He also indicated there was the chance of some modest hikes in the reasonably near future.
“I think there may be some possibility for rates to go up a little,” he said, adding that it would be conditional on the economy developing as the central bank expected.
“Conditional on expectations, we do think the economy will continue to grow and wage growth will pick up and there will still be little inflation still there — our forecasts show inflation a little above target,” he added.
However, he played down the importance of a first hike in over a decade, noting we have had rate rises in the past.
“One shouldn’t overdo this. If and when it happens there will be a lot of talk about the first rate rise since ‘x’. But it’s just a rate rise and we got perfectly used to rate rises of this size in the past,” Broadbent said.
Broadbent said the Bank’s MPC expected inflation to peak later in 2017.
“We think inflation peaks through the second half of this year, and will just begin to edge down through next year and we also think that wage growth will pick up a little later on,” he said.
“Certainly over the next three years we expect faster wage growth,” he said.
FRIDAY, AUGUST 4, 2017 – 02:32
–MNI London Bureau; tel: +44 203-586-2225; email: firstname.lastname@example.org