LONDON, Feb 5 (Reuters) - The Bank of England left interest rates on hold at 3.75% in a surprisingly close 5-4 split vote, with Governor Andrew Bailey and external policymaker Catherine Mann saying
Bank of England Governor Addresses Close Decision on Interest Rates
Bank of England's Monetary Policy Decisions
LONDON, Feb 5 (Reuters) - The Bank of England left interest rates on hold at 3.75% in a surprisingly close 5-4 split vote, with Governor Andrew Bailey and external policymaker Catherine Mann saying they could join those pushing to cut borrowing costs at some point.
Governor Andrew Bailey's Key Insights
Below are key comments from the press conference on Thursday.
Implications of the Rate Decision
GOVERNOR ANDREW BAILEY:
Future Outlook on Inflation
"Our first key policy judgment (is), that the risk from greater inflation persistence has continued to become less pronounced."
Wage Growth and Inflationary Pressures
"While wage growth may only be falling slowly, new bank staff analysis provides reassurance that structural changes in wage setting will not keep adding to inflationary pressures."
"Based on the current evidence, bank rate is likely to be reduced further, but judgments around further policy easing will become a closer call."
"On the one hand, cutting of the bank rate too quickly or by too much could lead to inflation pressures persisting, requiring policy to change course. On the other hand, waiting too long to ease policy could come at the cost of a sharper downturn in activity and subsequently inflation, requiring greater policy easing."
"If the economy and the outlook for inflation evolve as we expect, there should be some scope for further easing in monetary policy in the period ahead, but for every cut in bank rate, how much further to go becomes a closer call."
"We need to see more evidence, in my view, that we're going to get this sustainable return to target. And that really is an issue about what I call underlying inflation."
(Reporting by UK bureau)
