There are at least two hawkish members of the monetary policy committee who seem unlikely to be of the same thinking. Martin Weale and Ian McCafferty have made a number of comments indicating they will be quick to push for a rise if the data is strong, and do not want to run the risk of acting too late any more than Haldane wants to act too soon.
According to Nick Dixon, investment director at Aegon UK, the latest data may make the hawks chirp up soon, in contradiction with Haldane’s dovishness.
“The news that GDP growth was higher than expected for 2014 is welcome, but not necessarily surprising,” Dixon said. “Business sentiment suggested the UK economy continues to recover and that consumers are benefiting from low inflation and modest increases to real earnings.
“However, better than expected GDP estimates will only intensify hawkish calls on the Bank to normalise monetary policy sooner rather than later. Despite this, we still believe a rate rise is some way off, with volatility in Greece keeping the heat off policy makers for the time being.”
Perhaps after all is said and done what this means is that a neutral weighting is the way to go for now.
