During his scheduled speech in Yorkshire, BOE Chief Economist Andy Haldane reignited expectations for a relatively sooner rate-hike action by saying that partial withdrawal of accommodation from last August MPC move would be prudent.
• If policy tightened too late, this could result in a much steeper path of rate rises later on
• Considered the case for a rate rise at the MPC’s June meeting but didn’t act
• 2-reasons for not hiking yet: too few signs of higher wage growth & still some chance of a sharper than expected slowing in economy
• Hiking rates will be a sign that the economy has begun to normalize
• The world outlook is materially brighter than it has been for some time
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