Best to wait for more data on Omicron before hiking Bank Rate, BoE's Saunders says

One of the most hawkish top Bank of England officials said at the end of the week that it might be best to wait for more information on the implications of the new Covid-19 variant, Omicron, before hiking short-term interest rates.

In remarks prepared for a speech, Michael Saunders said: ""At present, given the new Omicron COVID variant has only been detected quite recently, there could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy."

Nonetheless, Saunders, one of the most hawkish members of the Monetary Policy Committee, was quick to point out that waiting too long to raise Bank Rate carried its own costs, including from a tighter labour market and already higher inflation expectations.

"At present, given the new Omicron COVID variant has only been detected quite recently, there could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy," he said.

His forecast was for higher short-term interest rates over the next few quarters.