© Reuters. FILE PHOTO-Silvana Tenreyro, professor in economics at the London School of Economics, participates in a panel titled “How Should Central Banks Battle High Inflation?” at the 2023 Spring Meetings of the World Bank Group and the International Monetary
By David Milliken
LONDON (Reuters) -Key determinants of British inflation such as wage growth and core goods prices are on track to slow, creating no need for further interest rate rises, Bank of England policymaker Silvana Tenreyro said on Thursday.
Tenreyro has opposed raising interest rates since December, and voted against the BoE’s most recent rate rise last week at her final meeting as an external member of the Monetary Policy Committee after two three-year terms.
“Overall, I … judged that the tightening already in the pipeline would be sufficient to bring inflation back to, and most likely below, the target,” she said in a speech hosted by the Society of Professional Economists and the Resolution Foundation think tank.
BoE Governor Andrew Bailey said the central bank had needed to raise interest rates by half a percentage point to 5% because of signs that inflation was proving stickier than expected, after unexpectedly strong wage and inflation data.
Tenreyro said she viewed these factors as being outweighed by a sharp tightening in financial conditions, as market interest rates had risen rapidly in the run-up to the meeting.
“The disinflationary impact of this would be more than sufficient to offset the recent data news, even in the unlikely event that all of that (inflation) news proved to be persistent,” she said.
“Forward-looking indicators had pointed towards falls in both pay growth and core-goods inflation over the rest of the year.”
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