BOE’s Saunders: A rise of 0.25% in bank rate would be quite small

The Bank of England (BOE) Monetary Policy Committee (MPC) member Saunders crossed the wires last hour, making a scheduled speech at Park Plaza Cardiff, in Wales.

Key Headlines:

Monetary policy implications of a bump Brexit not automatic, could in theory go either way

CPI likely to rise to 3% in coming months

Preferable to have the space to move gradually on rates

If we get behind the curve we lose that space

Does not a modest rise in rates to have a disproportionate effect on spending

GDP likely to be revised up

BOE not indifferent to GBP depreciation

A rise of 0.25% in bank rate would be quite small

Unwinding of QE would not be first means of tightening policy

No sign of UK productivity improvement yet

No definite FX level for pound that would trigger concern

We must take the exchange rate as it is

Part of recent pound fall is perception of better EU growth