MPC's Vlieghe says he will be patient when it comes to raising Bank Rate

The newest member of the Monetary Policy Committee said on Monday he would be patient when it came to raising Bank Rate, adding that the current context of very low interest rates makes him willing to be even more patient before contemplating a hike.

Some observers said Gertjan Vlieghe toed a very similar line to that of the Bank of England’s chief economist, Andrew Haldane, widely recognised as a dove, in his first speech as a member of the MPC.

Speaking at the London School of Economics, Vlieghe said he would wait until he was certain that growth was no longer slowing and that a mix of inflation measures were pointing higher before backing an increase in interest rates.

Pressures on wages were “surprisingly absent”, he noted.

“For a given level of growth, real interest rates may remain significantly lower than in the past. The possibility of this scenario makes me more patient, other things equal, before raising rates.

"We may not have to raise rates very much once we start. Moreover, the fact that, at very low interest rates, policy cannot respond as effectively to bad news as it can to good news also makes me more patient before raising rates," Vlieghe said.