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Third BoE policymaker hints at possible base rate cut in January

Liz Bury
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Liz Bury

A third member of the Bank of England’s (BoE) Monetary Policy Committee (MPC) has hinted a cut to the central bank’s key base rate could be imminent.

BoE policymaker Gertjan Vlieghe told the Financial Times he would consider voting for a cut depending on economic performance since the general election on 12 December.

“I really need to see an imminent and significant improvement in the UK [economic] data to justify waiting a little bit longer,” he told the FT.

Vlieghe’s comment follows similar remarks in the past week from outgoing BoE governor Mark Carney and Silvana Tenreyro, another member of the BoE’s Monetary Policy Committee.

Carney said: “If evidence builds that weakness in activity could persist, risk management considerations would favour a relatively prompt response.”

Tenreyro remarked at a conference in Westminster that a cut could happen if lack of certainty over a post-Brexit trade deal between the UK and EU continued dampening demand.

The MPC will meet at the end of January to vote on whether to cut the Bank Base Rate to 0.5 per cent, down from 0.75 per cent.

It will not then meet again until 26 March.

This month’s meeting will likely be Carney’s last as current Financial Conduct Authority (FCA) chief executive Andrew Bailey is set to take over as governor on 16 March.

The MPC voted 7-2 against a rate cut when it met in December 2019.