Martin Weale, external member of the Bank of England's monetary policy committee, writing in this weekend's Scotsman on Sunday newspaper.
In summary:
- Wage growth remaining firm
- Tightening labour market
- Means inflation is likely to rise above target in two to three years' time
- Policy needs to be set with reference to this, rather than the current rate of inflation
- As a result, it seems likely to me that the bank rate will need to rise relatively soon
- Precise path of interest rates will depend on the state of the economy
- Possible that a path of gradual rate rises might have to be reversed somewhat
(Maybe he is referencing the experience in New Zealand here, where rates were hiked last year only to be unwound a great deal this year ... but, no matter says Weale):
- A fear of costs associated with such a change of direction should not lead us to hold back from changing bank rate
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These aren't surprising comments from Weale, but, on balance, should be a positive input for GBP on Monday's opening.
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Link to Weale's article (h/t from Reuters and Bloomberg).
In other news from that newspaper ... Aberdeen, 2, beat Celtic, 1
