Rate rises must not be glacial, hawk tells Carney

Brexit uncertainty 'prevents surge' in UK economy

Brexit uncertainty 'prevents surge' in UK economy

Attempts by the Pound to mount a recovery later in the afternoon also proved to be short lived following comments by Bank of England (BoE) Governor Mark Carney late in the day. But MPC member Michael Saunders today brushed aside recent weak economic data, saying that the significance of the slowdown is "questionable".

He added: "Economic activity in March, and especially retail sales, was hit by unusually heavy snow". Previous experience suggests that such snow effects typically reverse in the next month or two'.

"Nor does "gradual" mean that the MPC can not tighten faster than markets price in", Mr Saunders said. "A key point is that "gradual" need not mean "glacial", he said.

In a BBC interview that sent the pound lower, Mr Carney said policy makers will make their decision "conscious that there are other meetings" at which they could act this year. I don't want to get too focused on the precise timing'. That tone continued to depress the pound yesterday, which fell by another half a cent to $1.4011.

Saunders was one of two MPC members to vote for a rate hike in March, from 0.5 per cent to 0.75 per cent, in order to curb growing inflation triggered by the collapse in the Brexit hit pound.

"First was Tuesday's improving, but lower than forecast, wage growth numbers; next Wednesday's one-year low inflation reading; and then on Thursday, March's "Beast from the East"-blighted retail sales".

An increase is "likely" this year, Mr Carney said in the comments, made on the sidelines of the International Monetary Fund meetings in Washington. "The culmination of this unhappy hat-trick came as Mark Carney put the boot in on Thursday night", said Spreadex's Connor Campbell.

In November the Bank of England raised the base rate for the first time in nearly a decade, and speculation about another rise in May has helped drive up mortgage market costs in recent weeks.

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