BoE external MPC Member Gertjan Vlieghe, speaking about the economic outlook and monetary policy at the Resolution Foundation in London, was noted saying that around 25bps rate hike a year is the reasonable central case if Brexit deal is done.
The degree of future monetary tightening will in part depend on how large Sterling appreciates after a Brexit deal and in case of a no-deal Brexit scenario, an easing or extended pause in monetary policy is more likely to be appropriate than tightening, Vlieghe added further.
• There is considerable uncertainty around my forecast for policy rate path.
• Signs of an economic slowdown in early 2019 means a lot needs to go right for this forecast to come to pass.
• I can probably wait for evidence of growth stabilizing, inflation pressure rising before considering a rate hike.
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