BoE's Sarah Breeden: Monetary policy restrictions expected to be removed 'gradually over time'

University of Edinburgh speech

Bank of England deputy governor Sarah Breeden has argued that recent developments in the UK economy support a gradual approach towards reducing monetary policy restrictiveness.

"In December, I judged that the evidence supported maintaining bank rate at 4.75% and that recent developments supported the case for a gradual approach to the withdrawal of policy restrictiveness in the coming months," Breeden argued. But she pointed to economic shocks and flagged the importance of "taking a view on which shocks are hitting the economy and how they might play out over time" in order to decide where monetary policy is heading. "Attributing data news to the 'wrong' shocks can have material implications for our understanding of the evolution of the economy in the future...