Further increases in Bank Rate not ruled out, MPC member says

A member of the Bank of England's Monetary Policy Committee has said that "further increases in Bank rate cannot be ruled out".

During a speech in Washington DC, external MPC member Jonathan Haskel said that "while some indicators suggest that the labour market is loosening somewhat, I view it as still very tight in an absolute sense: for example, the vacancies-to-unemployment ratio remains historically very high, as does unit wage growth".

He added that "the co-incidence of high core inflation and subdued activity suggests the supply side of the economy may have deteriorated".

Earlier this month the Bank of England's Monetary Policy Committee voted 7-2 to increase Bank Rate by 0.25% to 4.5% - the 12th consecutive rise and the highest level since October 2008. Two members preferred to maintain Bank Rate at 4.25%.

Haskel continued: "With such uncertainty, I believe it is prudent to reduce the focus we place on forecasts of the medium-term and put more weight on the near-term data."

Haskel said that he prefers "to lean against the risks of inflation momentum", adding that "as difficult as our current circumstances are, embedded inflation would be worse".

He concluded: "The MPC remains committed to bringing inflation sustainably back to the 2% target, and that is what we will do. But to do this, further increases in Bank rate cannot be ruled out."