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Bank of England rate cut 'possible' in summer, says deputy governor Broadbent

Published 20/05/2024, 13:27
© Reuters Bank of England rate cut 'possible' in summer, says deputy governor Broadbent
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Proactive Investors - Ben Broadbent, a member of the Bank of England's rate-setting committee, said the base rate could be cut at some point this summer.

Deputy governor Broadbent, who steps down next month after 13 years on the Monetary Policy Committee (MPC), made the comment in a speech this morning.

Following on from comments about the persistence of inflation, he said there is a "range of views" across the MPC on how persistent inflation could be.

"In view of the rarity of events like this over the past, and the associated uncertainty about the future, that’s entirely understandable.

"Whatever the priors of its individual members the MPC will continue to learn from the incoming data and, if things continue to evolve with its forecasts – forecasts that suggest policy will have to become less restrictive at some point – then it’s possible Bank Rate could be cut some time over the summer."

His comments come ahead of the Office for National Statistics publishing the latest consumer price index on Wednesday, which is expected to show a sharp drop in the level of inflation, close to the MPC's 2% target.

At the last policy meeting, two members of the committee voted for a cut, though the majority vote, including Broadbent, led to rates being kept at 5.25%.

A month ago, the ONS data showed CPI inflation was 3.2% in March, with April forecast to see a big softening to 2.1% in the annual rate, as the month-on-month figure eases to 0.2% from 0.6%.

Read more on Proactive Investors UK

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