BoE’s Ramsden signals shift on rates amid inflation

On Monday, Bank of England Deputy Governor Dave Ramsden indicated a potential shift in the central bank's stance on interest rates due to persistent high inflation. He raised this prospect during a Q&A session following a speech at the Money, Macro and Finance Society. Ramsden was questioned about whether rising energy prices and inflation alone would warrant a rate increase at a future meeting, or if he would require clearer evidence that these factors are impacting wage negotiations and businesses' pricing strategies.

He acknowledged the presence of "a period of higher and longer-lasting headline inflation," which is influencing his current thinking. Furthermore, Ramsden pointed out that by November, when the Bank of England is scheduled to set interest rates again, there should be preliminary indications of the trajectory of negotiations for 2027 wage agreements, which typically come into effect in March and April.