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Pound boosted as Bank policymaker speaks out against interest rate cut

Martin Weale

Bank of England policymaker Martin Weale has questioned whether interest rates will need to be cut next month in a bid to bolster the UK economy following the Brexit vote.

Mr Weale, a member of the Bank's Monetary Policy Committee (MPC), said the Bank was "not a nurse to markets" and there were no signs that consumers or business were "panic-struck" following the vote to leave the EU.

The value of the pound stepped up following his comments, trading up 0.26% against the dollar at 1.322 US dollars.

The MPC defied predictions by keeping interest rates on hold this month, but signalled action next month to boost the economy.

Speaking at the Resolution Foundation think tank, Mr Weale said: "The Old Lady of Threadneedle Street is not a nurse to markets."

"People who trade in markets know that the Monetary Policy Committee sets policy month by month."

He added: "A second argument to which I give little weight is the argument that early action is needed to reassure people.

"In contrast to the experience of 2008, I do not have any sense that either consumers or businesses are panic-struck and, as I observed, there have been no material signs of financial panic."

The minutes from Thursday's meeting suggested a rate cut from 0.5% may come next month, revealing that "most members of the Committee expected monetary policy to be loosened in August''.

They will wait until the Bank's quarterly forecasts on August 4 before taking further action and deciding which policy to follow.

Belfast Telegraph