OSLO, March 2(Reuters) - The Bank of England will soon find itself in a position where it will no longer face much of a trade-off between a slowing economy and inflationary pressures and there is a
Bank of England at Risk of Deficient Demand, Warns Policymaker Alan Taylor
Policymaker Alan Taylor Highlights Economic Risks
Trade-Off Between Economy and Inflation
OSLO, March 2(Reuters) - The Bank of England will soon find itself in a position where it will no longer face much of a trade-off between a slowing economy and inflationary pressures and there is a risk that demands falls too low, policymaker Alan Taylor said on Monday.
Comments from Alan Taylor at Oslo Conference
"I judge that we will soon find ourselves largely outside of trade-off territory – and even at risk of entering the familiar realm of deficient demand," Taylor said at a conference hosted by Norway's central bank in Oslo.
Factors Contributing to Deficient Demand
That was because "over 2025, and into 2026, broadly speaking, inflation has been weaker than expected in successive (BoE) forecasts, the unemployment rate higher, and wage growth lower," he said.
Monetary Policy Committee Decisions
Taylor was part of a four-strong minority on the BoE's Monetary Policy Committee which sought to cut benchmark interest rates to 3.5% from 3.75% last month. He said at the time he saw a risk that inflation could persistently undershoot the BoE's 2% target in the future.
Reporting and Editing Credits
(Reporting by Yoruk Bahceli in LondonEditing by William Schomberg)
