BOE member Jon Cunliffe speaks in Kendal
- Significant drop in activity in Q1 "looks to have been largely an aberration"
- That was driven by poor weather
- The likely overall picture is of an economy expanding around or a little above its potential rate of growth
- Balance of evidence suggests that growth path remains broadly intact
- Latest wage data does not signal strongly that pay growth will make the next step to establish itself in 3% territory
- Need a little more confirmation at each stage that the supply side is evolving as per forecast
- Brexit creates very material uncertainties for the UK economy
Well, the brushing aside of Q1 data isn't anything new really but he doesn't seem all too confident about the current situation and raising rates based on that. It seems that he feels a bit uneasy and he wants more confirmation via economic data to lean towards hiking rates if anything else.
This makes next week's data set from Tuesday to Thursday (inflation report, wages, retail sales) more important as it will help to skew those who are on the fence of a rate hike towards or away from deciding to go with a rate hike in the August meeting.
The full text of his speech can be found here.