Michael Saunders, the most recent appointee to the Bank of England’s interest rate setting committee, is to warn that the Bank’s forecasts of weak growth next year are likely to be wrong and the economy could recover strongly from the dip after the Brexit vote. But he is to hint that he is unlikely to vote for a rate rise in the next few months following his assessment of the labour market, which showed the bank’s forecasts of strong wage rises in 2017 and 2018 were optimistic. “My policy vote will probably depend on which of these factors is dominating,” he will say. After its policy meeting in early September, the Bank said most officials expected to cut rates again this year if growth looked on track to slow broadly as forecast in August. The Bank has substantial scope for further stimulus through asset purchases if required, he will say.

Source: The Guardian October 04, 2016 19:22 UTC