BoE’s Breeden: Increasingly Likely BoE Will Need To Respond If Risks Crystallise
Balance Of Risks Has Shifted - Not Obvious That There Is A Path To Lower Energy Prices - Indirect Pass Through Of Energy Price Rises Has So Far Been Limited, Suggesting Slack In Economy - The Larger The Energy Shock And Longer It Lasts, The More Likely BoE Policy Will Need To Respond - Cannot Wait Too Long For Conclusive Evidence Of 2nd Round Effects; Prefers Focusing On What Firms Say About Approach To Pricing Decisions - Sees DMP Survey, PMI, Agents' Survey As Important
Balance Of Risks Has Shifted - Not Obvious That There Is A Path To Lower Energy Prices - Indirect Pass Through Of Energy Price Rises Has So Far Been Limited, Suggesting Slack In Economy - The Larger The Energy Shock And Longer It Lasts, The More Likely BoE Policy Will Need To Respond - Cannot Wait Too Long For Conclusive Evidence Of 2nd Round Effects; Prefers Focusing On What Firms Say About Approach To Pricing Decisions - Sees DMP Survey, PMI, Agents' Survey As Important