BoE’s Mann: Impact of QT is a more salient issue now BoE is cutting rates.

Bank of England’s MPC (hawk) member Catherine Mann said that the bank should closely monitor the effects of its quantitative tightening (QT) programme on monetary and financial conditions, especially in light of the recent interest rate cuts.

Key Quotes

• BE cannot exactly offset high long-term rates caused by QT by cutting Bank Rate more.
• Extra cuts to short rates to compensate for QT could run counter to the need to purge structural rigidities in UK labour and product markets.
• I expect these issues will be part of MPC considerations before the September QT decision.
• Impact of QT is a more salient issue now that the BoE is cutting rates.