BOE's Tenreyro: Bank rate held at 3% over 2023 to reduce output further below potential

Bank of England (BOE) policymaker Silvana Tenreyro explained on Friday that her main rationale for a further tightening of the monetary policy last week was risk management, as reported by Reuters.

Key takeaways

"Too early to judge whether the labour market will loosen as forecast by the BOE."

"I expect this risk management rationale to be weaker in future months."

"I would expect that bank rate held at 3% over 2023 would reduce output further below potential."

"Policy would have to loosen, perhaps in 2024, to try to prevent inflation falling below target."

Market reaction

GBPUSD preserves its bullish momentum following these comments and was last seen rising 0.55% on the day at 1.1780.