March 14, 2019 / 2:19 PM / 8 days ago

BoE's Haskel wants inflation clarity before backing rate hike - FT

LONDON (Reuters) - The Bank of England’s newest interest rate-setter Jonathan Haskel said he wanted to see firm evidence of rising inflation before voting to raise borrowing costs, the latest official at the central bank to sound caution on the need for higher rates.

FILE PHOTO - Professor Jonathan Haskel, who has just been appointed to the Monetary Policy Committee of the Bank of England, is seen in this undated portrait released by HM Treasury in London, Britain, May 31, 2018. Jason Alden/UK Treasury/Handout via REUTERS

Haskel, who joined the BoE’s Monetary Policy Committee (MPC) in September, told the Financial Times he would “absolutely” wait to see concrete signs of rising inflation before voting to raise rates.

His comments fitted with a more cautious stance about Britain’s economy adopted by the BoE last month, spurred not just by Brexit but also by a slowing global growth.

“If we see movements in output, as economists, we want to see what the movements in price are to know whether it is supply or demand,” Haskel said in an interview published on Thursday.

Last week fellow MPC member Silvana Tenreyro said she would “need to see” domestic price pressures rising before voting to raise rates.

Another of the BoE’s nine rate-setters, Gertjan Vlieghe, last month said he can probably wait to see too.

The BoE’s central view is that a limited and gradual increase in rates will be needed over the next few years, assuming Brexit passes smoothly.

The British parliament was due to vote on Thursday on seeking a last-minute Brexit delay, while Prime Minister Theresa May piled renewed pressure on reluctant lawmakers to back her EU divorce deal at the third time of asking.

Haskel said “everything has been dominated by Brexit” since the BoE raised rates to a new post-financial crisis high of 0.75 percent in August 2018.

He said the MPC had little time to discuss big-picture issues like productivity these days, given the uncertainty about what Brexit will mean for Britain.

Writing by Andy Bruce; Editing by William Schomberg

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