Breeden BoE good place was the main message from her latest remarks, as she said the Bank of England can watch events before taking any policy action.
She said UK inflation would now sit at the Bank of England’s 2% target without the inflation effects of the war. She also said the recent rise in inflation has mostly come from external supply factors, not fresh domestic price pressure. As a result, she signaled that policymakers have room to assess incoming data.
Breeden added that the Bank is in a good place to monitor developments. She said officials can judge how the geopolitical shock develops before they consider a response. Meanwhile, she argued that the inflation push from the conflict looks less likely to spread into wages, inflation views, and wider pricing behavior.
Breeden BoE Good Place View
That point matters because it lowers the risk of lasting inflation pressure that would call for tighter monetary policy. She also said there is little reason to raise interest rates given the UK’s weak economic backdrop. Therefore, sluggish growth remains a key factor for policymakers.
Her comments support the view that the Bank of England will stay patient for now. Officials are watching whether higher energy prices spread into broader inflation or fade as a temporary drag. However, the economy continues to show subdued growth.
Markets are pricing in 27 basis points of tightening by year-end. Additionally, the first rate hike is seen coming in September at the earliest, with a 61% probability.
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Source: InvestingLive
