The BoE has raised interest rates eight times since December 2021.

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Bank of England Deputy Governor Dave Ramsden backed more rate hikes on Thursday, but said he would consider a rate cut if the economy and inflationary pressures performed differently than he had expected.

Ramsden is the latest member of the Monetary Policy Committee to mention the possibility of a rate cut at some point, after the BoE earlier this month said market expectations for rates above 5% were too high.

“Despite my bias towards further tightening, if the economy develops contrary to my expectations and the persistence of inflation ceases to be a concern, then I will consider the case for cutting bank rates, as appropriate,” Ramsden said in a speech at King’s College London. .

But Ramsden also said he would “continue to vote for a forceful response” if inflationary pressures proved stronger than expected.

He describes his approach to setting policy as “vigilant and responsive.”

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Earlier this month, MPC member Silvana Tenreyro said she saw rates on hold this year and then fall in 2024, while another, Swathi Dhingra, warned that excessive policy tightening could trigger a deep recession.

A Reuters poll published on Wednesday showed a majority of economists thought the BoE would raise rates again next month to 3.5% from 3.0%, although nearly a quarter of them said a bigger rate hike to 3.75% was likely.

The BoE has raised interest rates eight times since December 2021.

Ramsden said the government’s budget statement published earlier this month – which consists of tax hikes and spending curbs – is likely to depress economic growth and inflation.

“However, most of these measures do not go into effect until April 2025 so will have very little effect over the MPC’s three-year forecast, relative to what was assumed in the November MPC,” Ramsden said.

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Ramsden said he was “deeply aware” that the BoE was adding to household hardships – but added that the MPC must take the necessary steps to return inflation to the BoE’s 2% target.

Ramsden also added that Britain’s international reputation had yet to fully recover from the financial turmoil sparked by former finance minister Kwasi Kwarteng’s mini-budget on September 23, despite a drop in borrowing costs.