BOE Dhingra in an interview with The Times, played down inflation worries and the calls for rate cuts. Says that factors driving rising costs will 'soon fade' and claimed the economy will be damaged by restrictive policy.

  • Inflation outlook

    • Drivers of UK inflation (indexed/administered prices, global commodity shocks) will soon fade.

    • UK is not facing a “uniquely British” inflation problem compared with Europe.

    • Food price inflation is not worse than in continental economies; some UK-specific items (like chocolate) skew the measure.

    • Wage growth plays a smaller role in services inflation than headlines suggest (61% in market-based services vs. 27% in administered services).

  • Policy stance

    • Restrictive monetary policy risks damaging the economy.

    • “We should not be overly cautious about cutting interest rates.”

    • Supports further cuts without endangering the inflation target.

    • Dissented at the last meeting, calling for a cut to 3.75% (vs. 4.0% current).

    • Stresses that administered price shocks (e.g., water bills, bus fares) are not responsive to tight policy.

  • Economic risks

    • UK projected to have the highest inflation in the G20 this year (OECD sees 3.5%).

    • Warns prolonged tight policy will strain businesses and growth.

    • Divides within the BoE sharpen, as others (e.g., Megan Greene) advocate caution on rate cuts.

Bottom line: Dhingra leans decisively dovish — arguing inflation pressures will fade and warning that tight policy risks damaging growth. She’s pushing harder for cuts than the BoE consensus, widening the split on the MPC.

Source: Investing Live