LONDON (Reuters) - The Bank of England’s nine interest-rate setters have to decide whether to raise British interest rates for the first time in a decade in six weeks’ time.
The BoE surprised markets on Sept. 14 when it said, despite the big uncertainties about Brexit, that most of its policymakers thought a rate hike was likely in the coming months, if underlying inflation pressure continues to grow.
The signal came even as the Monetary Policy Committee members voted 7-2 to keep rates at their all-time low of 0.25 percent, meaning at least three of its members will have to switch their vote if the BoE is to raise rates on Nov. 2.
Following is a brief description of each of the MPC’s members and their latest comments on the outlook for rates.
For an interactive version, double-click on tmsnrt.rs/2eSYykb.
MARK CARNEY, GOVERNOR - LIKELY TO VOTE FOR A HIKE SOON
Since arriving at the BoE more than four years ago, Carney has signaled on previous occasions that a rate hike might be coming, only to be wrong-footed by the economy’s twists and turns. This time, he has sounded more emphatic. Carney said on Sept. 14 that he was one of the majority of MPC members who saw the balance of risks shifting toward inflation and away from weak growth and a hike was likely to be needed in the coming months. “Now, we will take that decision based on the data. I guess that possibility has definitely increased,” he said.
BEN BROADBENT, DEPUTY GOVERNOR FOR MONETARY POLICY - LIKELY TO VOTE FOR A HIKE SOON
Carney’s number two for interest rates and other measures to help the economy, Broadbent has yet to speak publicly since last week’s surprise announcement. But in August he said a hike would not be a big risk, suggesting he was getting close to changing his vote. “I think there may be some possibility for interest rates to go up a little bit,” he said “One shouldn’t overdo this. If and when it happens there will be a lot of talk about the first rate rise since ‘x’. But it’s just a rate rise and we got perfectly used to rate rises of this size in the past.”
ANDY HALDANE, CHIEF ECONOMIST - LIKELY TO VOTE FOR A HIKE SOON
Haldane shook up markets in June when he said he was likely to vote for a rate hike in the second half of 2017. Previously, he had been considered one of the strongest supporters of continued record low rates. “Provided the data are still on track, I do think that beginning the process of withdrawing some of the incremental stimulus provided last August would be prudent moving into the second half of the year.”
JON CUNLIFFE, DEPUTY GOVERNOR FOR FINANCIAL STABILITY - MIGHT VOTE FOR A RATE HIKE SOON
Cunliffe’s expertise lies in bank regulation and he is not known for taking strong individual positions on monetary policy. He is therefore likely to take his lead from Carney although on June 28, in his most recent public comments on rates, he said: “(We) do have to look at what’s happening to domestic inflation pressure, and I think that on the data we have at the moment, gives us a bit of time to see how this evolves.”
DAVE RAMSDEN, DEPUTY GOVERNOR FOR MARKETS AND BANKING - VIEW ON RATE OUTLOOK UNKNOWN
Ramsden joined the BoE in September having previously worked as the top economic advisor at Britain’s finance ministry. He has made no public comment on the outlook for rates although he voted to keep them on hold last week. He is no stranger to the MPC debates having attended 92 of its meetings in his previous role at the Treasury.
GERTJAN VLIEGHE, EXTERNAL MPC MEMBER - MIGHT VOTE FOR A RATE HIKE SOON
Vlieghe pushed up the pound by almost as much as the surprise Sept. 14 BoE announcement when, a day later, he suggested that he too was close to voting for a rate hike. Until then, the former hedge fund economist had argued against such a move and was seen as the BoE’s strongest supporter of record-low rates. “If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in Bank Rate might be as early as in the coming months,” he said on Sept. 15.
SILVANA TENREYRO, EXTERNAL MPC MEMBER - VIEWS ON RATE OUTLOOK UNKNOWN
Tenreyro is another newcomer to the MPC which she joined in July. She has voted twice to keep rates on hold and is widely considered to be one of the BoE’s more dovish policymakers based on her previous academic work which highlighted the potential damage to Britain’s economy from Brexit. So far, she has not spoken publicly since joining the BoE.
MICHAEL SAUNDERS, EXTERNAL MPC MEMBER - HAS VOTED FOR A RATE HIKE SINCE JUNE
Saunders, a former economist with financial services firm Citi, has been in the minority of MPC members voting for a rate hike since June. “I think households should prepare for interest rates to go higher at some point. But if rates do go up, it will be in the context of the economy doing OK and unemployment being low and probably falling,” he said on July 4.
IAN MCCAFFERTY, EXTERNAL MPC MEMBER - HAS VOTED FOR A RATE HIKE SINCE JUNE
McCafferty has voted on and off for a rate hike over the past three years and is currently the other MPC member, alongside Saunders, who supports a hike to 0.50 percent. “I feel on the balance of monetary policy that there is a need for change. I think this would be justified and would be the prudent thing to do at this stage,” he said on July 4.
Reporting by William Schomberg; Editing by Toby Chopra