Sarah Breeden (pictured), the Bank of England's new deputy governor for financial stability.
In her first speech in the new role, Sarah Breeden said while the UK economy was «moving in the right direction» to return inflation to the 2% target, the BoE's job «is not done».
With price rises slowing in the UK, as well as across the eurozone and in the US, financial markets have been pricing in cuts to interest rates in 2024.
But Breeden, who voted to hold rates at 5.25% at the December MPC meeting, said she was still deciding if they should rise from this level.
UK consumer confidence hits three-month high but remains negative
«The question I am focused on is whether there is evidence of more persistent inflationary pressures which means we may need to tighten further,» she said.
Wage growth and employment trends will be key to helping her decide how to vote in upcoming MPC meetings, Breeden explained.
«I will be focused on signs that the loosening in the labour market is accelerating, and wage growth is falling more sharply than expected,» she said.
The growth in wages eased in the three months to September as vacancies fell, in signs the central bank's interest rate hiking plan may be taking effect.
Regular pay, excluding bonuses, grew by 7.7% in July to September, according to data from the Office for National Statistics. This is down slightly on the previous periods, but is still among the highest annual growth rates since comparable records began in 2001.
However, Breeden sounded cautious notes that rates will stay higher for longer, even in the event no further rate hiking is needed, echoing previous comments from other members of the MPC such as Bank governor Andrew Bailey.
UK economy shrinks 0.3% in October as
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