BoE's Ramsden: Recent market movements to have significant effect on November forecasts
07.10.2022, 10:43

BoE's Ramsden: Recent market movements to have significant effect on November forecasts

Bank of England (BOE) Deputy Governor Dave Ramsden said on Friday that they will assess the impact on demand and inflation of the government's growth plan during the forecast round leading up to the next policy meeting, per Reuters.

Key takeaways

"UKs energy support package represents a very significant fiscal intervention, which can be thought of as a shock."

"Impacts of UK's growth plan likely to be material for economic outlook over next three years, which is also the horizon relevant for monetary policy."

"Recent market movements could have a significant direct effect on the November forecasts and on the committee’s broader assessment of financial conditions."

"Overall, the adjustment in market prices has been consistent with tighter monetary policy globally."

"Part of market re-pricing continues to reflect broader global developments, but there is undoubtedly a UK-specific component."

"I think of BOE's gilt buying operation as an operation designed to buy time."

"One key consideration for the MPC at its upcoming meetings will be whether recent repricing of UK assets reflects a changed assessment by markets of the UK macroeconomic policy mix between fiscal and monetary policy."

Market reaction

GBP/USD edged slightly lower from session highs after these comments and was last seen rising 0.35% on the day at 1.1198.

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