The upside risks to inflation have increased - BoE's Forbes

In my assessment, it is now time to recalibrate the degree of monetary policy support for the economy, said Kristin Forbes, member of the Bank of England’s Monetary Policy Committee, in an exclusive interview to the Telegraph.

Key quotes

• Monetary policy will continue to be set to keep inflation at around 2pc on a sustainable basis, taking into account our assessments of any trade-off with growth and unemployment.
• In my personal assessment, this trade-off has fundamentally changed
• Headline inflation is picking up sharply. Although it is close to 2pc today, the MPC’s February forecast predicts it will reach 2.7pc within a year. 
• Domestic price pressures have also picked up
• Although wage growth has been disappointing, this likely reflects temporary caution around Brexit
• The upside risks to inflation have also increased. Global economic activity and inflation are picking up
• Economic activity has been substantially stronger than expected since the Brexit vote
• At Wednesday’s meeting, I voted to increase Bank Rate by 25 basis points
• I realize that increasing Bank Rate would have risks
• But these risks will continue for years. Monetary policy should not go on hold. If anything, these risks and the Brexit trees should make us even more nimble