BoE politician says stimulus could end sooner; US Unemployment Claims At Pandemic Low – As Happened | Business
“Michael Saunders’ speech acknowledges that inflationary pressures have surprised on the upside in recent months. Any change in Bank of England policy still requires the approval of the majority of the Monetary Policy Committee, but Saunders makes the argument going on among the Bank’s rate-setters that some stimulus might need to be withdrawn in the coming months.
“It shouldn’t be surprising, but the markets are likely to take the news badly. The most recent moves in monetary policy have been to ease and were made last year in the face of a Covid-induced economic shock when we were unsure of when or if vaccines could get us out of the pandemic. We can now see a path to normality, so reversing some stimulus makes sense.
“It is clear that the Bank’s willingness to cope with the current rise in inflation was based on the belief that the slowing labor market would keep wages lower, preventing a widespread increase in demand, but there is signs that new hires are joining at higher wages, with fewer workers on leave than expected at this point.
“Investors on both sides of the Atlantic have come to fear any tightening of stimulus measures, but we must bear in mind that such measures would only come in response to healthy growth of economies and wages. higher for workers, which ultimately improves the prospects for corporate profits. . “