LONDON (Reuters) – Bank of England (BoE) President Andrew Bailey said on Tuesday that he could further reduce the use of the guidance tool for monetary policy and that the central bank could restate that decisions will be made meeting by meeting.
Speaking to the British Parliament’s Upper House Economic Affairs Committee, Bailey reiterated that he was not a fan of the kind of forward guidance implemented by his predecessor, Mark Carney, and that even the current inclusion of explanations about the BoE’s worldview may be excessive.
“We’re going to keep under review what I would call limits on giving the kind of signal we gave three weeks ago — which basically said ‘here’s our worldview…this is what will follow from it.’
“There is an alternative view, that we should go from meeting to meeting and not give any guidance. This is not off the table at all. This is ground very well trodden by the Monetary Policy Committee and I can imagine us going back to it.”
Recently, financial markets interpreted comments made by Bailey in October as a sign that interest rates would rise this month – something that ended up not taking hold – rather than a more general guidance that rates were heading towards increases.
(by David Milliken)
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