- Rates need to rise faster and more than markets expect to bring CPI back to target
- MPC should focus on value of sterling as it seeks to steer inflation back to target
- A benefit of higher rates would be stronger sterling, mitigate global price pressures
- Unlikely that global inflation will quickly subside in way inflation report assumes
- BOE’s faith in output gap measures has resulted in big forecasting errors for some years
- Surveys suggest pay growth picking up again, should expect this trend to continue
Cable shoots back over 1.6100 in wake of comments, presently at 1.6120.
Don’t know whether I’m imagining it, but his tone seems even more hawish than normal.
