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BoE's Saunders Says Current Policy Stance Clearly Accommodative

The current monetary policy stance is clearly accommodative and if interest rates would be raised in future, the tightening path may be limited and gradual, Bank of England policymaker Michael Saunders said Friday.

"A modest rise in rates would still imply that considerable stimulus remains in place, helping to support output and jobs," Saunders said in a speech in London.

Defending his vote for unchanged policy in March, the rate-setter said that there was plenty of data still to be received and insights to be gained.

He also stressed on the importance of clearly explaining any monetary policy decision.

Saunders also said that the Monetary Policy Committee is not necessarily obliged to delay any policy moves until there is certainty over the exact shape of Brexit and its long-run effects on the economy.

"We make our decisions from meeting to meeting, and will fulfill our remit during the Brexit process and after it," Saunders said.

"Any policy decision carries risks that subsequent events make the decision controversial, but that is always the case."

Saunders, an external member on the MPC, also noted that perceptions of the economic outlook have already changed markedly in recent months and may well continue to do so.

And hence, it was natural for policy to respond to the changing outlook if needed, consistent with the bank's low inflation remit, he added.

by RTT Staff Writer

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