One of the Bank of England’s policymakers is “not yet convinced” of the need for more monetary easing in the post-Brexit economy.
In a speech to be delivered in London later today, Kristin Forbes is expected to say that she remains reticent on the need for more easing from the central bank following a three-pronged stimulus programme unleashed in August and with a majority of the BoE’s rate-setters set to cut rates again this year.
“I am not yet convinced that additional monetary easing will be necessary to support the economy”, Ms Forbes will say in a speech at Imperial College, London.
“The initial effect on the UK economy of the referendum has been less stormy than many expected”.
Ms Forbes, who has emerged as one of the more hawkish members of the monetary policy committee, will say the direction of growth since the Brexit vote had “shifted in a more favourable direction”:
The economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction.
Ms Forbes was the only one of the BoE’s rate setters to vote against the bank’s August move to buy up government and corporate debt in the wake of the Brexit vote. She has since voted in favour of keeping rates on hold in September.
In its latest monthly decision earlier this month, the BoE said another rate cut was still on the table this year as its outlook for the post-Brexit economy remained largely unchanged. Bank rate currently stands at an all-time record low of 0.25 per cent.