Taylor Dismisses Rate Hike Calls, Cites Limited Evidence

Bank of England policymaker Alan Taylor has downplayed the need for interest rate hikes, saying that raising rates 'is not compelling' unless energy prices remain high and have a bigger knock-on effect on the economy.

Taylor, a member of the Bank's Monetary Policy Committee (MPC), made his comments in a speech at the National Institute of Economic and Social Research (Niesr).

He noted that higher energy costs are currently concentrated within the energy complex itself rather than spreading widely through the economy.

Taylor emphasized that the Bank must stay 'alert' to developments in the economy, but that interest rate hikes should rest on evidence of second-round effects gaining traction, rather than just the existence of an energy shock.