Bank of England rates regulator casts doubt on August cut | Business News

Hopes of a summer interest rate cut have been dashed by a member of the Bank of England’s rate-setting committee.

Jonathan Haskel said he wanted to keep interest rates unchanged because inflation pressures remain on the job market, according to the text of a speech he is expected to give at King’s College London later on Monday.

The document, released by Banksaid Haskel would declare: “The job market remains tight and I fear it is still hurting.

“I prefer to hold rates until there is more certainty that underlying inflationary pressures have eased sustainably.”

Latest Money:
Pubs want ‘shameful’ cooperative advert removed from TV

Haskel is considered the main hawk on the nine-member Monetary Policy Committee (MPC) – a “hawk” being defined as one who is more likely to lash out to quell inflation, while “pigeons” are more inclined to look for interest rates. lower.

He was among the members, until February of this year, advocating that the Bank’s rate rise from its current level of 5.25%.

His call for prudence before the next rate decision on August 1 goes against the opinion of the financial market and many economists.

On Monday, 60% of bets were on reducing the rate to 5%, according to LSEG data.

This August meeting will be Mr Haskel’s last, as his second term on the MPC is due to end at the end of August.

His named successor has not yet been announced.

As an external member of the MPC – that is, someone who does not work for the Bank – the appointment falls to new Chancellor Rachel Reeves.

She has prioritized economic growth and may be tempted to opt for a more peaceful figure.

A rate cut – following seven consecutive decisions to maintain – would help businesses and consumers hurt by the battle against the pace of price increases by increasing borrowing costs.

At first glance, there is no reason for the Bank to wait because the consumer price index (CPI) inflation measure returned to the Bank’s 2% target last month for the first time since 2021.

Read more on Sky News:
Boeing will admit fraud to avoid trial over fatal crashes
Main economic challenges facing the first female chancellor of the Labor Party and the United Kingdom

However, base wage growth remains at 6% – approximately double the rate that most policymakers consider consistent with 2% inflation.

Services inflation is also stubbornly high.

Bank Governor Andrew Bailey emphasized that inflation must be sustainably close to the target before the Bank will act.

Your team’s projections point to an increase in the IPC in the second half of the year.

The governor has repeatedly indicated that progress has been made against inflation and that the bank rate’s next move will almost certainly be downward, barring further inflationary shocks.

There is a final set of employment and inflation figures before the MPC meeting in August.