BoE MPC member Silvana Tenreyro said yesterday that “much of the downside Q1 GDP news is likely to be erratic”. However, that still increased the “possibility of some underlying weakness in demand”.
Back in the May meeting, Tenreyo said the costs of waiting-and-see for a short period were relatively slow. And BoE will likely get a “significantly clearer picture of the underlying strength of domestic demand quite soon”. Therefore, there were “to leaving policy unchanged.”
Overall, Tenreyo said “while I anticipate that a few rate rises will be needed, the timing of those rate rises is an open question.”
Tenreyro’s messages were consistent with BoE’s own forecast in the inflation report that there would be a rate hike in August. That is, BoE opted to wait a little while more in May till August to make a decision. And, that is data dependent.
