Central Banks
BOE’s Broadbent Says UK Rates May Not Rise as Much as Market Expects
- Pound and gilts decline as investors rein in bets for big hike
- Remarks indicate caution at the BOE about pace of tightening
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Bank of England Deputy Governor Ben Broadbent said it’s not clear that UK interest rates need to rise as much as investors expect and warned about a hit to the economy if markets bets come to pass.
While “the justification for tighter policy is clear” in the face of soaring inflation, demand will slow to some extent anyway along with higher prices, Broadbent said in the text of a speech on Thursday. If rates follow the current path, it could cause a 5% hit to GDP, he said.