LONDON (Reuters) -Bank of England Deputy Governor Dave Ramsden said on Tuesday that inflation pressures remained persistent and he wanted more evidence about how long they were likely to remain strong before considering a change in the BoE’s high interest rates.
“Although services inflation and wages growth have fallen by somewhat more in recent months than we had expected last autumn, key indicators of inflation persistence remain elevated,” Ramsden said in the text of a speech delivered at the Association for Financial Markets in Europe (AFME) conference.
Ramsden was one of six of Monetary Policy Committee members who voted to keep interest rates on hold at 5.25% at the BoE’s last meeting, while two members voted for a quarter-point increase and one for a quarter-point cut.
Ramsden said he supported the BoE’s “more balanced outlook” for how inflation might behave that investors saw as opening the door for a reduction in borrowing costs in the coming months.
“In terms of my thinking about the future, I am looking for more evidence about how entrenched this persistence will be and therefore about how long the current level of Bank Rate will need to be maintained,” Ramsden said.
The BoE has predicted inflation will fall to its 2% target in the second quarter of 2024 but will subsequently rise to around 2.75% later this year.
Investors are currently betting on the central bank to start cutting interest rates from August.
(Reporting by William SchombergEditing by Suban Abdulla)
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