Bank of England’s policymaker Gertjan Vlieghe to vote in favor of monetary policy leniency

Bank of England’s policymaker Gertjan Vlieghe to vote in favor of monetary policy leniency

  • Gertjan Vlieghe of the Bank of England says he'll vote for a rate cut later this month.
  • Vlieghe says the recent economic data doesn't give a reason to delay the rate cut.
  • BoE's Silvana Tenreyro says she'll vote for a rate cut in upcoming months if economy doesn't lift up.
  • GBP/USD failed above 1.3100 level again last week as it closed at 1.3058 on Friday.

The volatility in the UK’s economy is evident amidst the ongoing events of Brexit. Analysts are increasingly getting wary of whether the December 2020 deadline would be sufficient for the United Kingdom and the European Union to strike a broader trade deal. In times of uncertainty that is weighing on the economy at large, the Bank of England (BoE) has already started a discussion regarding the potential pros and cons of a rate cut in the upcoming weeks.

Gertjan Vlieghe Sees The Need Of A Rate Cut Amidst The Economic Instability

Gertjan Vlieghe of the BoE was reported stating on Sunday that in light of the instability in the UK’s economy, he has decided in favor of monetary policy leniency and will be voting for a rate cut later this month. The policymaker also highlighted that the recent economic data is suggesting a need for further stimulus to boost the country’s economy.  

Vlieghe’s comments, however, are not the first that hint at an imminent rate cut from the Bank of England. The recent developments have been highlighting the prospect of monetary policy leniency from the BoE in the upcoming weeks. BoE’s Governor, Mark Carney, stated himself in the past week that if the economic weakness extends into 2020, the chances of a rate cut from the Bank of England at the end of January would be higher than previously thought.

BoE’s Silvana Tenreyro To Favor Rate Cut If The UK’s Economy Doesn’t Pick Up

Another prominent policymaker, Silvana Tenreyro, also commented on Friday and expressed her plans of voting in favor of a rate cut in the next few months if the UK’s economy fails to lift up. The country’s economy started to lose traction in 2016 after the first referendum for Brexit. Towards the end of 2019, the economy was seen losing pace at a rate that marked historically high. While PM Johnson’s victory in the UK’s general election on December 12th had lifted the sentiment, the optimism wasn’t sustainable and was lost back soon thereafter.

According to Vlieghe, a clearer insight into the economy’s current state will be available to the policymakers by the end of this month. The results of the business and household surveys in the upcoming weeks, he added, will contribute to making an informed decision about the monetary policy later this month.

GBP/USD failed to keep above the crucial 1.3100 level in the last week again as it closed at 1.3058 on Friday.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.