“There are lots of unpredictable shocks hitting the economy, things that would otherwise (and often do) move output and inflation around, the appropriate path of interest rates is necessarily unpredictable as well,” Bank of England (BOE) Deputy Governor Ben Broadbent said in his speech on Wednesday.
Additional quotes
“The Russian invasion of Ukraine has led to substantial rises in the cost of energy and other commodities.”
“As a big net importer of manufactures and commodities it’s doubtful that the UK has ever experienced an external hit to real national income on this scale.“
“From the narrow perspective of monetary policy it will result in the near term in the difficult combination of even higher inflation but weaker domestic demand and output growth.”
“My impression is that central bank communications can be sometimes mistaken for firmer commitments than they really are.”
Market reaction
GBP/USD is off the daily highs of 1.3134 on the above comments, currently trading at 1.3125, higher by 0.31% on the day.