Two Bank of England rates banks ask for precaution to inflation prospects

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Two policymakers of the Bank of England have warned of reducing interest rates as a result of last week’s quarter reduction, as they emphasized the need to see more evidence than inflationary risks.

Clare Lombardelli, Deputy Governor of BOE and member of the External Monetary Policy Committee, Megan Greene, on Monday that his votes to reduce rates to 4.25 percent had been well balanced, despite the departure of the Donald Trump’s trade war.

In the speeches at the BOE Watchers conference in London, they emphasized the signs of persistent inflationary pressures in the economy and requested precaution for prices.

Lombardelli said that while indicators of the future suggested a “substantial progress” in the growth of salaries by the end of the year, the published data showed that it was “still too high” to be consistent with the 2 percent of the Central Bank on the Central Bank inflation Objective.

“The precaution is still appropriate. I will be more comfortable when I see the material slowdown in the data for a longer period,” he added.

Salary growth reached 5.9 % in three months until February, according to the Office of National Statistics.

Greene said that the inflation of services – which reached 4.7 percent in March – had slowly retired and was worried about the signs of upward movements in inflation expectations.

“I don’t think we can remove the tape ticker and suggest -(inflation) is transient; there are still reasons to be worried about the persistence of inflation,” added Greene.

The reduction of BOE interest rate has been the fourth reduction since summer 2024, reaching the cost of loan at the lowest level from 2023.

But also revealed A three -way division: Most MPC members supported the quarter-knit reduction, while two favored a larger and more semicircular reduction and two desired rates to stay at 4.5 percent.

Although Lombardelli “was balanced between withholding rates and reduction” before the meeting, he said that the gradual advances in reducing the inflation and fall of Trump’s rates had pushed him back.

In the short term, Trump’s rates to imports in the United States “and the most uncertain -American policies will probably reduce growth and inflation,” he added, “due to the reduction in demand and commercial deviation of reduced exports in the rest of the world.”

Greene said he went into the vote “quite torn on whether it was maintained or reduced by 25 basic points”, but that trade was one of the reasons for his decision to support a reduction.

“I think, on the network, trade should be deflating,” added Greene.

The United Kingdom last week got the First deal with the USA Since Trump began to impose high rates, agreeing on punitive rates to vehicle exports and steel, but has not reversed a 10 percent flat amount that applies to most property.

BOE governor Andrew Bailey, who voted to reduce his rates last week, hosted the agreement as “good news”, but warned that he still left the effective rate of more than Trump before increasing the members’ barriers of America.

Welcoming a The rates treat between the United States and ChinaLombardelli warned on Monday that in the long term, “if global trade was fragmented, this would reduce production and productivity and increase inflationary pressures.”

Greene said that developments between the United States and China would not have changed their vote.

This is due to the fact that the deviation of the trade flows of US rates could still have a disinflation impact and, due to the continuous uncertainty about what is happening between the United States and the EU in commercial barriers.