BoE's Saunders: Prepare for higher interest rates - The Guardian

Michael Saunders, the BoE MPC member, gave an interview to The Guardian in which he explained why he voted for a rise.

Key quotes:

• I think households should prepare for interest rates to go higher at some point. But if rates do go up, it will be in the context of the economy doing OK and unemployment being low and probably falling
• We are not constrained from adjusting interest rates during the Brexit period. There’s no sense that policy has to stay on hold just because Brexit negotiations are under way
• At the moment, in monetary policy terms if you like, our foot is pretty much on the floor with the accelerator. Record low policy rate, large stock of quantitative easing, and I don’t think the economy needs as much stimulus as that
• The risk that you run with maximum stimulus is that the jobless rate keeps falling then at some point if pay growth picks up you have to reverse course very sharply.
• It would then be much harder for tightening to be limited and gradual. You’d be having to play catch-up