Vlieghe sees 'huge uncertainty' around path for interest rates
Bank of England policymaker Gertjan Vlieghe set out reasons why he has become increasingly hawkish over interest rates.
Following the more hawkish turn from the Bank's monetary policy committee last week, deputy governor Vlieghe said there was "increased evidence that tight labour markets are finally starting to have some upward effect on wages."
Speaking as a panellist at a Resolution Foundation event in London on Monday morning, he said three rate hikes from the BoE would still leave some excess demand in the economy but he wanted to stress that there is "huge uncertainty" around the rate path, with rates possibly rising faster or more slowly.
Last Thursday, the Bank left policy unchanged but said rates would need to rise sooner than previously indicated as the UK economy grows more strongly than it previously forecast thanks to the booming global economy.
The MPC said if the economy performed as expected "monetary policy would need to be tightened somewhat earlier and by a somewhat greater degree over the forecast period than anticipated at the time of the November report". In November, the committee only saw the need for two rate hikes over the next three years.