BOE's Saunders: It may become appropriate fairly soon to withdraw some stimulus

Author: Justin Low | Category: Central Banks

Remarks by BOE policymaker, Michael Saunders

  • Activity seems to have recovered a bit faster than May forecast
  • Risks lie on the side that output gap will close earlier than previously expected
  • Question on whether to curtail QE early will be a consideration in coming meetings
  • Options to withdraw stimulus include curtailing QE (ending it in the next month or two) and/or further policy action next year
  • If bank rate does rise in the next year or so, it is likely that any rise would be relatively limited in nature
The pound is jumping higher on these remarks by Saunders, as he projects a more detailed view on how the central bank is viewing the latest economic conditions in the UK.

The talk on rate hikes is also something that will be welcome by sterling bulls as Saunders is already floating the possibility - albeit one that will be a limited, gradual rise.

Cable moving up from 1.3840 to a session high of 1.3875 though price action is still relatively contained between 1.3800 and 1.3900 throughout the week so far.
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