In a speech given during a meeting with the London Chamber of Commerce and Industry, John Gieve said that the Bank had seen a sharp slowdown in growth because of last year's Base Rate hikes.
He said: "That in itself might justify a progressive shift in policy – from restrictive to a more neutral stance. And the case for easing has been greatly strengthened by the disruption in global credit markets and in our own banking system which brings a risk of a deeper downturn.”
However, he noted that the increase in global oil and food prices was being amplified by a fall in sterling to impact on the UK economy and push inflation.
“In reaching our decisions, the MPC always looks not just at the central projection for the economy but at the risks on either side. That will require not just difficult judgements but careful explanation in the months ahead," he concluded.
