Bank of England and MPC has a major job on its hands, says AMI's Sinclair

29 June 2016

Robert Sinclair, CEO of advisory trade body, the Association of Mortgage Intermediaries (AMI), has today said that the Bank of England and its Monetary Policy Committee (MPC) has a significant job on its hands over the next few months in terms of how it reacts to the post-Brexit fallout.

Speaking at Financial Services Expo (FSE) Cardiff, the premier exhibition for the financial services industry in Wales & the West, Sinclair said: “The big question is what next for the Bank of England and the MPC. It is really caught on the horns of two issues – whether it protects the value of sterling or it controls inflation.”

Sinclair said that the way the Bank/MPC prioritises those two problems will dictate what it chooses to do with the Bank Base Rate (BBR).

“How far can you cut BBR?” he asked. “Can you go to negative BBR? These are questions that are being discussed now. The MPC will have to make decisions in July, August and September about continued quantitative easing (QE) and the direction of BBR. Normally it wouldn’t want to make decisions within those months at all.”

In terms of the direction of BBR Sinclair stressed that the decision could go either way. “For the first time in possibly six or seven years there is total uncertainty about what the next movement might be,” he said. “What I can say is that it is highly unlikely that we will see BBR back to levels such as 3% in any timescale I can see.”

FSE Cardiff is taking place for the first time today at the SSE Swalec Stadium at Sofia Gardens in the Welsh Capital.