Ramsden says BOE likely to raise rates again

BANK of England Deputy Governor Dave Ramsden said he thinks interest rates will have to rise again to control inflation, though hasn’t yet decided how to vote on the issue next month or how high they may eventually go.

“For me personally, I do think it’s more likely than not that we will have to raise bank rate further,” Ramsden said in an interview with Reuters published Tuesday. “But I haven’t reached a firm decision on that. I’m to look at the indicators, look at the evidence as we approach each upcoming meeting.”

With inflation at a 40-year high and expected to accelerate, Governor Andrew Bailey and his colleagues have pushed through a series of rate rises and have yet to signal any potential end to the tightening. Russia’s invasion of Ukraine pushed up natural gas prices, which will hit consumers with a record increase in utility bills in October.

“We’re in extraordinary period where a lot is changing,” Ramsden said. “So I wouldn’t want to make any predictions about where bank rate is going to end up. I guess one thing I would say is I think inflation expectations remain anchored, and that’s really important.”

He also said the BOE would keep selling bonds from the Asset Purchase Portfolio it built up during the quantitative easing policy over the last decade even if officials eventually lower interest rates. The BOE said last week there would be a “high bar” to changing the timing of those sales, which may be approved as early as next month.

“I think that’s consistent with the way we communicated things, that we’ll carry on with the pace of QT in the background,” Ramsden said, according to Reuters. BLOOMBERG