BOE’s Lombardelli: I support a gradual removal of monetary policy restriction

• It is too early to declare victory on inflation
• Will be monitoring data flow in the coming months to calibrate policy as needed
• UK economy has made good progress on disinflation
• But persistent components of inflation and labour market uncertainty are causes for concern
• Outlook for wages, services prices is unclear
• BOE is hampered by challenges on quality of labour market data
• November PMI may suggest some slowing in the economy
• But don’t want to take a strong signal from just one single release
• Views the probabilities of downside and upside risks to inflation as broadly balanced

A little bit of this and a little bit of that. But her overall stance appears to fall in line with most of the policy committee at least. That in the sense that they favour a more “gradual” approach to cutting rates. As things stand, traders are pricing in ~79% odds that the BOE will leave the bank rate unchanged at 4.75% in December.

This article was written by Justin Low at www.forexlive.com.