5 April 2023 - Two MPC members have opposite views on monetary policy
Silvana Tenreyro is the most dovish independent member of the Bank of England’s Monetary Policy Committee. She has voted for interest rates to remain unchanged at the last two meetings of the committee. Yesterday, she spoke of her view that the Central Bank may need to cut interest rates earlier than has been previously forecast in order to avoid what she called a significant inflation overshoot. She believes that as the full effect of previous rate hikes are fully felt, they will drag down the economy, raising the spectre of a recession. Last month, the MPC voted to raise rates for the 11th consecutive meeting, raising the base rate to 4.25%. It is widely felt that the Bank will raise interest rates by a quarter of a percent at its next meeting on May11th, and then announce a pause in hikes. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.