Ramsden, deputy governor of the Bank of England, made his point in the annual report of the Finance Committee of the UK Parliament. He is giving testimony along with Silvana Tenreyro, a member of the monetary policy committee, and other central bankers.
"the risks to economic activity and the inflation outlook are two-way," Ramsden said. In terms of these two alternative scenarios, I think more about inflation than anti-inflation. However, for the UK and the world, there is still a lot of uncertainty.
"if the economy moves forward, as we predicted, with a gradual rise in the central bank's benchmark interest rate, then I expect some tightening measures will be needed to sustain the inflation target," Tenreyro said in her annual report. But given the great uncertainty facing the economy, it is important to assess the data to be released next, especially the labour market and inflation data.
"the central bank benchmark interest rate is still my preferred tool to influence overall demand and inflation, with less uncertainty and less dependence on current economic conditions. But given that negative interest rates are now available as a tool for policy easing, it should also be possible to lift QE sooner, while continuing to use the central bank's benchmark interest rate as a positive policy tool.