Rate rise is approaching, says BoE's Vlieghe

Vlieghe has previously voted to maintain Bank Rate at 0.25%, but says that he has been "struck particularly" by certain developments in recent months.

In a speech delivered in London today, he said that if data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, "the appropriate time for a rise in Bank Rate might be as early as in the coming months".

Vlieghe continued: "The wider economic backdrop over the past year has been one of improving global growth, and in particular an improving outlook for Eurozone growth, which generally benefits UK external demand. But, acting in the other direction, is the continued uncertainty about the UK’s future trading relations with the EU and the rest of the world. That uncertainty is likely to be dampening investment growth at the moment as firms put some projects on hold pending further clarity.

"There remains a risk that, at some stage, the uncertainty surrounding the Brexit process has a larger impact on the economy than we have seen so far. If that happens, monetary policy would respond appropriately.

"But for now, it seems the net effect of the many underlying forces acting on the UK economy is that slack is continually being eroded and wage pressure is gently building."