BoE's Ramsden says inflation risks now more likely to rise
Ramsden points to local food costs and wage agreements, and says the Bank's quantitative tightening plan remains a credible and logical strategy
Published
Bank of England deputy governor Dave Ramsden said inflation risks are now more likely to increase than to ease, pointing to local food costs and wage agreements as the drivers to watch. He said a further interest rate increase may be necessary if inflationary pressures continue, while describing the Bank's quantitative tightening plan as a credible and logical strategy.
The comments mark a change in tone from last week. On Friday, Bank of England governor Andrew Bailey said artificial intelligence could cushion the economy against energy price shocks, noting that pass-through from high energy prices had been subdued so far, though he added it was too early to judge.
Ramsden's warning lines up with what markets have already been pricing in, four to five rate increases through 2027. By naming wage agreements and local food costs specifically, he adds weight to the case for tightening at a time when growth remains weak next to other major economies. For investors, that combination sharpens the risk that borrowing costs stay higher for longer even as the economy struggles to keep pace with peers.