© Reuters. FILE PHOTO: Bank of England Governor Andrew Bailey attends the Monetary Policy Report Conference at The Bank of England, in London, Britain November 3, 2022. REUTERS/Toby Melville/Pool/File Photo
LONDON (Reuters) – Bank of England Governor Andrew Bailey and other top British central bank officials spoke to lawmakers in parliament on Wednesday, two weeks after the BoE raised interest rates by the highest level since 1989 to tackle inflation.
Below is a quote from Bailey and his colleagues on the Monetary Policy Committee (MPC) during a question and answer session with the Treasury Committee of parliament.
BAILEY’S PAYMENT INCREASES:
“I don’t have to raise the salary. It’s not my choice but if I’m offered one, I won’t accept it and I’ll respectfully decline as I’ve done before.”
BAILEY ON THE LABOR MARKET:
“It’s still a very difficult labor market … the reason we’ve said it’s likely that we’re going to increase interest rates is that risk, not assuming that the average case rate is going down too much.”
BAILEY ON UK RISK PREMIUM:
“Let’s be honest, there was something about UK risk money that was created in the markets.”
Asked how much the UK risk premium is today, he said: “It’s hard to say but I would say in the markets, a lot has come out. It’s not going to go back to zero.”
BAILEY ON IMPACT OF SEPT. 23 ‘MINI-BUDGET’:
“We’ve damaged our reputation around the world … it’s going to take a lot longer to repair that reputation than it will to repair the gilt.”
BAILEY ON THE WORLD TOUR:
“Part of competition is to have effective regulations, and the other part is to have a good regulatory framework … we don’t have to be intimidated.”
BAILEY ON SUPPLY SHOCKS:
“What we’ve had since then (the pandemic) is what has happened, particularly in the UK economy, which has reduced…
“There was a chain reaction to the Covid recovery… Now we’re seeing this amazing evidence coming in.”
BAILEY ON INFLATION:
“The price numbers seem to be starting to come out.”
MPC MEMBER CATHERINE MANN ON SUPPORTING POLICY:
“I also put a lot of weight on the research that has been finding that under the pressure of inflation … that the binding of advanced policies is easier to achieve results that are better to control inflation.”
MPC MEMBER SWATI DHINGRA CONCLUSIONS:
“You can think about going into deeper, longer positions if prices continue to rise because there’s already almost a large portion of past inflation to go in terms of what they do to GDP.”
“There’s a risk of a lot of consolidation, and that’s something I’m worried about right now.”
DINGRA ON POST-BREXIT TRADE:
“It is now undeniable that we are seeing a significant decline in sales in the UK compared to the rest of the world.”
“There is also a part of export activities… there, too, we see a very strong stand. We are doing what is below in terms of the number of exports, in terms of what is imported, even bigger than that.”
