Tue, Jul 19, 2016 - Page 10 News List

Bank of England’s Weale unsure on cutting rates

Reuters, LONDON

Bank of England policymaker Martin Weale yesterday said he was unsure whether he would back an interest rate cut at next month’s meeting of the central bank, in contrast to most of his colleagues who think stimulus is likely after Britain voted to leave the EU.

Weale — who is to step down after next month’s meeting — did not see panic among consumers or businesses after the June 23 Brexit vote and said the central bank should not be afraid of disappointing markets.

“The Old Lady of Threadneedle Street is not a nurse to markets. People who trade in markets know that the Monetary Policy Committee sets policy month by month in the way that its members think appropriate,” Weale said.

“A second argument to which I give little weight is the argument that early action is needed to reassure people. In contrast to the experience of 2008, I do not have any sense that either consumers or businesses are panic-struck,” he added in a speech at the Resolution Foundation think tank.

Sterling gained against the US dollar after Weale’s comments, as it did after the central bank held interest rates at 0.5 percent on Thursday last week, contrary to widespread expectations of a first cut in more than seven years.

Bank of England Governor Mark Carney two weeks ago said that he expected the central bank to give the economy more help over the summer.

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