LONDON (Reuters) - Top Bank of England official Ben Broadbent is not ready to raise interest rates just yet, he said in a newspaper interview published on Wednesday, substantially lessening the chances that borrowing costs will rise soon.
Deputy Governor Broadbent said the mood among businesses was central to his analysis and that it was “very difficult” for the bank’s Monetary Policy Committee to judge whether there had been a significant improvement.
“In my opinion, it is a bit tricky at the moment to make a decision (to raise rates). I am not ready to do it yet,” Broadbent told the Press and Journal newspaper during a trip to the Scottish city of Aberdeen.
Investors have keenly awaited Broadbent’s thoughts on rates, because he has not commented publicly since the Monetary Policy Committee came unexpectedly close to raising interest rates for the first time in a decade last month.
Several analysts have said the views of Broadbent - who is deputy governor for monetary policy - would be key to assessing the chances of a first BoE rate hike in a decade.
Broadbent said economic growth had been “okay” during the last six to 12 months and pointed to rising employment and inflation.
“There is reason to see the committee moving in that direction (higher interest rates) – but there are still a lot of imponderables,” he said.
The Press and Journal quoted Broadbent as saying that many companies would remain nervous about their prospects while they were “one or two years down the road” of knowing what Brexit means.
On Tuesday, Broadbent said in a speech that a reduction in trade between Britain and the European Union would harm both economies and causes prices to rise.
New MPC member Silvana Tenreyro, who replaced rate-increase advocate Kristin Forbes this month, has yet to speak on policy.
Reporting by Andy Bruce, editing by Larry King