BOE’s Cunliffe: BOE Can Keep Record-Low Rate as Inflation Cools

Bank of England Deputy Governor Jon Cunliffe said slowing inflation and a bleaker outlook for the economy justify keeping emergency stimulus for longer.

“We’ve now seen evidence of a slowing in U.K. growth, and prospects for the global economy have deteriorated,” Cunliffe said in a speech late yesterday in Cambridge, England. “The softening in the pay and inflation data, together with the weaker external environment, for me implies that we can afford to maintain the current degree of monetary stimulus for a longer period than previously thought.”

Cunliffe’s comments echo those of BOE Chief Economist Andy Haldane, who said last week he’s become “gloomier” about the economic outlook. They are among a majority of policy makers who want to keep the benchmark interest rate at a record-low 0.5 percent, and minutes of the BOE’s October meeting showed they hardened their position because of increased threats to the recovery from the euro area.

Bloomberg

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