BoE's Vlieghe: projects one or two 0.25% rate hikes over a 3-year forecast period
|Continuing with his testimony before the Treasury Committee, in London, the BoE's external MPC Member Gertjan Vlieghe was further noted saying:
• His central projection is one/two 0.25% rate increases will be needed per year.
• This will be over a three-year forecast period.
• Says his central forecast is slightly above the rates path in May's inflation report.
• Long-run impact of Brexit is not BOE's main concern.
• The BOE is though concerned with domestic reactions to Brexit vote.
• Unwinding of asset purchases likely to take place when rates have moved up sufficiently that they can be used effectively in either direction.
• Risks to productivity growth over the next few years are probably skewed to the downside of BoE's 1% forecast.
• US trade tariffs have been too small to have a material effect on UK economy.
• Even if additional US trade measures discussed so far are implemented, it would probably still not have a material effect on the UK.
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