BOE’s Tenreyro: MPC far from the point at which we will unwind QE

The Bank of England (BOE) MPC new member Silvana Tenreyro is on the wires now testifying before the TSC. 

Key Points:

GBP depreciation has created stronger inflation and weak demand

My vote will depend on incoming data

Wage growth has been very very weak

Most measures of domestically generated UK inflation have been below target-consistent levels

If economy consistent with Aug central projection, policy could need to be tightened greater extent than markets expect

With long-term equilibrium lower, monpol need to set nominal interest rates at lower level to meet inflation target

Rise in UK net exports after currency fall may not happen

Some evidence that premature rate increase that turns out to be a mistake could need more cuts in future

MPC far from the point at which we will unwind QE

Agrees with MPC stance on timing of unwinding QE

Should proceed very gradually when BOE starts to unwind QE