Bank of England's Haskel Doesn't Look Like He's Itching for a Rate Cut

Above: File image of Jonathan Haskel. Image copyright: Pound Sterling Live, Still Courtesy of Imperial College Business School.

The Bank of England's Jonathan Haskel continues to resist talk of imminent UK interest rate cuts, saying there is still more work to be done in order to get inflation to the 2.0% target on a sustained basis.

Speaking at City University, Haskel said, "the labour market is central to the inflation aspect" with regards to bringing inflation down on a sustained basis. He explained that labour market tightness was reducing, but "rather slowly" and it was unclear if it was falling fast enough to keep inflation on target.

Labour market tightness reflects the ratio between job vacancies and unemployment; if the market is tight, workers are able to command better remuneration, which economists say is inflationary.

"The persistence of inflation depends a lot on how quickly that ratio comes down," he said. "Reasonable people might reasonably disagree about the risks."

In March, Haskel said, "although the fall in headline inflation is very good news, it is not informative about what we really care about: what we really care about is the persistent and the underlying inflation. I think cuts are a long way off."

Haskel's latest comments follow those of fellow Monetary Policy Committee members Andrew Bailey and Dave Ramsden. Both said they see inflation as trending in the right direction, resulting in rising market expectations for a June rate cut.

Amidst this repricing, the Pound has fallen against the Euro, Dollar and other currencies

But Haskell's comments suggest he is in no rush to vote for a June cut, which should limit the market's recent repricing in expectations. Haskel will likely form a coalition with Catherine Catherine Mann and Megan Greene in resisting a mid-year cut in favour of proceeding in August.