BOE's Dhingra: I'm not worried about cutting rates too early being the worst thing to do

<ul><li>We took a a long time to get rates up</li><li>Couple that with the transmission lags, we're still looking at a pretty restrictive period of monetary policy even after you start the moderation</li><li>Fairly convinced that falling prices are not solely driven by energy alone</li><li>At this point, about 97% of annual CPI inflation items have turned down</li><li>Fall in retail sales is pretty convincing and unexpected</li><li>Not fully convinced of sharp excess demand in the economy from the consumption side</li><li>Does not see a reason to trade off weak consumption when inflation is on a sustainable path at this point</li><li>If you do the right policy and if you even deviate for the right reasons, people will understand</li></ul><p>Dhingra was the only one to vote for a 25 bps rate cut at the latest policy meeting <a href="https://www.forexlive.com/centralbank/boe-leaves-bank-rate-unchanged-at-525-as-expected-20240201/" target="_blank" rel="follow">here</a>. She's saying that she is convinced of a continued decline in inflation and considering the state of consumption activity, a rate cut would be appropriate now. She argues that even with cutting rates early, monetary policy will still be restrictive.</p>

This article was written by Justin Low at www.forexlive.com.