# Inflation and the Bank of England: what its rate-setters are saying
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-07-19
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Bank of England's Options for Tightening Monetary Policy
Meta Description: Discover differing views of Bank of England officials on taking action to combat inflation as UK reopens economy. Learn more about upcoming policy decisions
URL: https://financedigest.com/inflation-and-the-bank-of-england-what-its-rate-setters-are-sayinghtml

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LONDON (Reuters) – Some Bank of England officials say the time is approaching for action to fend off higher inflation as Britain reopens its economy, but others want more time to assess the risks or say the jump in prices is likely to prove temporary.

Following are highlights of BoE policymakers’ recent comments about inflation and the outlook for the central bank’s bond-buying programme and near-zero benchmark interest rates.

The BoE is due to announce it next [monetary](https://www.financedigest.com/ecbs-centeno-says-rate-cycle-likely-completed-inflation-retreating.html) policy decisions on Aug. 5 along with new forecasts for the economy.

For an article on what the BoE’s options for tightening [monetary policy](https://www.financedigest.com/uks-ftse-100-dips-on-scope-of-tighter-monetary-policy-informa-jumps.html "UK’s FTSE 100 dips on scope of tighter monetary policy; Informa jumps") are, click on.

ANDREW BAILEY, GOVERNOR

July 15: “What we will have to do, again, is go through all the evidence and assess to what extent we think the sorts of things that underlie that are likely to be transitory … I do react somewhat to people who say ‘the [Bank of England’s](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure") being casual about it’.

DAVE RAMSDEN, DEPUTY GOVERNOR ( [MARKETS & BANKING)](https://www.financedigest.com/market-stress-indicators-react-sharply-after-u-s-bank-failures.html "Market stress indicators react sharply after U.S. bank failures")

July 14: “Based on the rapid pace of developments since we [published our May forecasts](https://www.financedigest.com/publisher-bloomsbury-casts-upbeat-forecast-says-books-affordable-pastime.html "Publisher Bloomsbury casts upbeat forecast, says books ‘affordable pastime’") and the shift in the balance of risks, I can envisage those conditions for considering tightening being met somewhat sooner than I had previously expected. That reflects my current assessment that on balance I put more weight on my inflationary than my disinflationary scenario.”

JONATHAN HASKEL, EXTERNAL MEMBER

July 19: “In the immediate term, the risk of a pre-emptive monetary [tightening curtailing the recovery continues to outweigh the risk of a temporary period of above-target inflation](https://www.financedigest.com/inflation-trumps-financial-risks-as-central-bank-tightening-set-to-continue.html "Inflation trumps financial risks as central bank tightening set to continue"). For the [foreseeable future](https://www.financedigest.com/recent-technological-advancements-to-propel-growth-of-the-sesame-oil-market-in-foreseeable-future.html "Recent Technological Advancements to Propel Growth of the Sesame Oil Market in Foreseeable Future"), in my view, tight policy isn’t the right policy.

MICHAEL SAUNDERS, EXTERNAL MEMBER

July 15: “In my view, if activity and [inflation indicators remain in line with recent trends and downside risks to growth and inflation do not rise](https://www.financedigest.com/shares-rise-but-concern-mounts-over-inflation-flare-up.html "Shares rise, but concern mounts over inflation flare-up") significantly (and these conditions are important), then it may become appropriate fairly soon to withdraw some of the current monetary stimulus … For me, the question of whether to curtail our [current asset](https://www.financedigest.com/current-assets-in-accounting.html "Current Assets In Accounting") purchase program early will be under consideration at our forthcoming meetings.

JON CUNLIFFE, DEPUTY GOVERNOR ( [FINANCIAL STABILITY)](https://www.financedigest.com/digital-pound-could-hit-financial-stability-and-erode-privacy-uk-lawmakers-warn.html "Digital pound could hit financial stability and erode privacy, UK lawmakers warn")

[July](https://www.financedigest.com/uk-inflation-rate-slows-to-6-8-in-july.html) 14: “One shouldn’t [expect the reopening of the economy](https://www.financedigest.com/german-economy-likely-grew-in-q1-beating-expectations-bundesbank.html "German economy likely grew in Q1, beating expectations – Bundesbank") to be smooth. This is not something that you can just close down and reopen without bumps in the way … We’re [seeing a surge in demand](https://www.financedigest.com/inpost-sees-stronger-2022-but-warns-of-slowing-demand.html "InPost sees stronger 2022 but warns of slowing demand"). We’re seeing some constrictions in supply that’s [driving inflation](https://www.financedigest.com/inflation-drives-britains-record-christmas-grocery-sales.html "Inflation drives Britain’s record Christmas grocery sales"). How persistent is that (is the) clear question… We would expect some of these pressures, and we would expect transitory pressures at this stage.”

GERTJAN VLIEGHE, EXTERNAL MEMBER

May 27: “The first [rise in Bank](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") Rate is likely to become appropriate only well into next year, with some modest further tightening thereafter…. It would probably take until the first quarter of [next year to have a clear](https://www.financedigest.com/whats-coming-next-in-the-clearing-and-settlement-world.html "What’s coming next in the clearing and settlement world?") view of the post-furlough unemployment and wage dynamics.

BEN BROADBENT, DEPUTY GOVERNOR ( [MONETARY POLICY)](https://www.financedigest.com/eurozone-equity-rally-remains-on-but-ecb-set-to-change-monetary-policys-direction-of-travel.html "Eurozone equity rally remains on – but ECB set to change monetary policy’s direction of travel")

May 7: Broadbent said policymakers were less likely to loosen policy than they thought three months earlier.

“The bias toward easing that we might have had is less pronounced,” he said.

SILVANA TENREYRO, EXTERNAL MEMBER

April 12: “One [lesson that we learned](https://www.financedigest.com/learning-the-lessons-of-the-bangladesh-bank-heist.html "LEARNING THE LESSONS OF THE BANGLADESH BANK HEIST") from the financial crisis is that withdrawing policy support too early can be very costly.

“Withdrawing it too early… can lead to scarring effects on the [labour market](https://www.financedigest.com/spains-labour-market-resilient-as-unemployment-drops-in-nov.html "Spain’s labour market resilient as unemployment drops in Nov") that would be very costly and slow down growth going forward.

(Writing by William Schomberg)


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