Central Banks
BOE Official Tells Hawks That Rates Are Too High for Economy to Withstand
- Silvana Tenreyro steps up her criticism of further rate rises
- Remarks reflect growing debate about direction of policy
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Bank of England policy maker Silvana Tenreyro warned that interest rates are higher than the economy can bear and that overtightening would be like Milton Friedman’s “fool in the shower” who scalds himself by being too impatient to wait for the water to warm up.
Tenreyro said rates have already been raised too far and inflation will fall below the BOE’s 2% target in the medium term as a result.