Bank of England Deputy Governor Ramsden said in a written report to lawmakers on Tuesday that in view of uncertainty in estimating the neutral interest rate level, the Bank of England should continue to gradually reduce borrowing costs. Ramsden pointed out that as interest rates approach “neutral levels,” the impact of monetary policy on inflation will become more difficult to judge. He said, “Therefore, I think it is still appropriate to continue to gradually lift policy restrictions. This allows the Monetary Policy Committee to carefully evaluate the balance of inflation risk as evidence continues to accumulate.” Bank of England Deputy Governor Ramsden said the neutral interest rate was “close” to the midpoint of the 2%-4% range. He said he does not currently believe there is evidence that economic trends have deviated from our benchmark forecasts.

Bank of England Deputy Governor Ramsden said in a written report to lawmakers on Tuesday that in view of uncertainty in estimating the neutral interest rate level, the Bank of England should continue to gradually reduce borrowing costs. Ramsden pointed out that as interest rates approach “neutral levels,” the impact of monetary policy on inflation will become more difficult to judge. He said, “Therefore, I think it is still appropriate to continue to gradually lift policy restrictions. This allows the Monetary Policy Committee to carefully evaluate the balance of inflation risk as evidence continues to accumulate.” Bank of England Deputy Governor Ramsden said the neutral interest rate was “close” to the midpoint of the 2%-4% range. He said he does not currently believe there is evidence that economic trends have deviated from our benchmark forecasts.