LONDON (MNI) – Bank of England Monetary Policy Committee Member
David Miles today said today the time is not yet right to tighten
monetary policy as economic conditions in the UK are not yet ‘normal’.
“I look forward to the day when it will be appropriate to tighten
monetary policy since a return to more normal levels of interest rates
would be a welcome sign that economic conditions were also more normal.
But I do not think that is where we are today.”
Miles said he does not believe that the current above-target
inflation rate is sustainable, given that underlying inflation pressures
are not strong. Miles went on to say that above target inflation would
be unsustainable without a pickup in wages, which he regarded as
unlikely.
“Without a pick up in wage inflation I find it hard to think it at
all likely that inflation being significantly above target is
sustainable. Of course wage pressures may build significantly over the
next year or so, though I do not believe this is the most likely
outcome.”
Miles also said that risks of an extended period of low growth –
which would further weaken those pressures – remain “real”.
–London Bureau; Tel: +442078627492; email: wwilkes@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
