The Bank of England will probably have to raise interest rates further from their current 14-year high to tackle inflation pressures that are gaining a foothold in Britain's economy, Deputy Governor Dave Ramsden has said.
Inflation's spread is now showing up in rising British pay and companies' pricing plans, having originally been triggered by the reopening of the world economy from Covid-19 lockdowns and then by Russia's invasion of Ukraine, Mr Ramsden said.
Inflation is expected to return to the BoE's 2 per cent target — down from above 9 per cent now and a projected peak of 13 per cent in October — as the economy goes into a recession and borrowing costs rise.
But there is also a risk of an inflation mentality developing, Mr Ramsden said.
“For me, personally, I do think it is more likely than not that we will have to raise bank rate further. But I haven't reached a firm decision on that,” Mr Ramsden said.
“I am going to look at the indicators, look at the evidence as we approach each upcoming meeting.”
The BoE last week raised borrowing costs by the most since 1995 as it took the benchmark rate to 1.75 per cent from 1.25 per cent, its sixth increase since December, compounding the biggest two-year disposable income hit for households since at least the 1960s.
“We know that what we are doing is adding to an already very challenging environment,” Mr Ramsden said.
“But our assessment is we needed to act forcefully to ensure that inflation doesn't become embedded.”
Mr Ramsden, a former senior official at Britain's finance ministry who joined the central bank in 2017, said a fall in inflation expectations in financial markets was encouraging, as were signs that households and companies thought central bankers would come to grips with the problem.
Asked if the benchmark interest rate was close to hitting a peak, Mr Ramsden said that over the past year the BoE had to deal with the end of Covid-19 restrictions that hammered Britain's economy and the Russia-Ukraine war that pushed inflation to its 40 year-high.
“We are in extraordinary period where a lot is changing. So, I wouldn't want to make any predictions about where bank rate is going to end up,” Mr Ramsden said.
“I guess one thing I would say is I think inflation expectations remain anchored and that is really important.”
As well as raising interest rates, the BoE plans to move Britain's economy off its massive stimulus programmes by starting to sell government bonds — a process known as quantitative tightening (QT) — as soon as next month.
Asked whether the BoE would continue to sell bonds if it needed to go in the opposite direction and cut interest rates to support the economy — something investors expect to happen next year — Mr Ramsden said that was a possible scenario.
“I am certainly not ruling out a situation where, when we look at the risk to the economy, having been raising [the] bank rate, at some point we then have to start lowering it quite quickly,” he said.
“I can imagine situations, yes, where we will carry on … with a pace of QT in the background.”
The tightening effect of selling down the BoE's bond stockpile was likely “at the margin”, said Mr Ramsden, who as the BoE's deputy governor for markets is in charge of its balance sheet.
Mr Ramsden also pushed back at criticism of the central bank's inflation-fighting record by Liz Truss, the front-runner to become Britain's next prime minister, and her supporters, some of whom have suggested the BoE should have less independence.
Mr Ramsden said British inflation had averaged 2 per cent — the BoE's target — over the 25 years after the central bank was granted operational independence in 1997.
While there was a case for learning from the experience of other central banks around the world — something Ms Truss has proposed — there would be risks in any attempt to give politicians more of a say over how to set interest rates.
“I think it is perfectly reasonable to look at international experience … and see how it is operating,” Mr Ramsden said.
“That is quite distinct … from going back and revisiting independence itself.”
England squad
Joe Root (captain), Alastair Cook, Keaton Jennings, Gary Ballance, Jonny Bairstow (wicketkeeper), Ben Stokes (vice-captain), Moeen Ali, Liam Dawson, Toby Roland-Jones, Stuart Broad, Mark Wood, James Anderson.
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
'How To Build A Boat'
Jonathan Gornall, Simon & Schuster
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
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Notable salonnières of the Middle East through history
Al Khasan (Okaz, Saudi Arabia)
Tamadir bint Amr Al Harith, known simply as Al Khasan, was a poet from Najd famed for elegies, earning great renown for the eulogy of her brothers Mu’awiyah and Sakhr, both killed in tribal wars. Although not a salonnière, this prestigious 7th century poet fostered a culture of literary criticism and could be found standing in the souq of Okaz and reciting her poetry, publicly pronouncing her views and inviting others to join in the debate on scholarship. She later converted to Islam.
Maryana Marrash (Aleppo)
A poet and writer, Marrash helped revive the tradition of the salon and was an active part of the Nadha movement, or Arab Renaissance. Born to an established family in Aleppo in Ottoman Syria in 1848, Marrash was educated at missionary schools in Aleppo and Beirut at a time when many women did not receive an education. After touring Europe, she began to host salons where writers played chess and cards, competed in the art of poetry, and discussed literature and politics. An accomplished singer and canon player, music and dancing were a part of these evenings.
Princess Nazil Fadil (Cairo)
Princess Nazil Fadil gathered religious, literary and political elite together at her Cairo palace, although she stopped short of inviting women. The princess, a niece of Khedive Ismail, believed that Egypt’s situation could only be solved through education and she donated her own property to help fund the first modern Egyptian University in Cairo.
Mayy Ziyadah (Cairo)
Ziyadah was the first to entertain both men and women at her Cairo salon, founded in 1913. The writer, poet, public speaker and critic, her writing explored language, religious identity, language, nationalism and hierarchy. Born in Nazareth, Palestine, to a Lebanese father and Palestinian mother, her salon was open to different social classes and earned comparisons with souq of where Al Khansa herself once recited.
McLaren GT specs
Engine: 4-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 630Nm
Price: Dh875,000
On sale: now
The specs
Engine: 1.6-litre 4-cyl turbo and dual electric motors
Power: 300hp at 6,000rpm
Torque: 520Nm at 1,500-3,000rpm
Transmission: 8-speed auto
Fuel consumption: 8.0L/100km
Price: from Dh199,900
On sale: now
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The Bio
Favourite place in UAE: Al Rams pearling village
What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft
Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans
Best time to swim in the sea: When there is enough light to see beneath the surface
How to report a beggar
Abu Dhabi – Call 999 or 8002626 (Aman Service)
Dubai – Call 800243
Sharjah – Call 065632222
Ras Al Khaimah - Call 072053372
Ajman – Call 067401616
Umm Al Quwain – Call 999
Fujairah - Call 092051100 or 092224411
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Killing of Qassem Suleimani
FINAL SCORES
Fujairah 130 for 8 in 20 overs
(Sandy Sandeep 29, Hamdan Tahir 26 no, Umair Ali 2-15)
Sharjah 131 for 8 in 19.3 overs
(Kashif Daud 51, Umair Ali 20, Rohan Mustafa 2-17, Sabir Rao 2-26)
Palestine and Israel - live updates
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
Brief scoreline:
Manchester United 2
Rashford 28', Martial 72'
Watford 1
Doucoure 90'
Brief scoreline:
Manchester United 2
Rashford 28', Martial 72'
Watford 1
Doucoure 90'
Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
The specs: Rolls-Royce Cullinan
Price, base: Dh1 million (estimate)
Engine: 6.75-litre twin-turbo V12
Transmission: Eight-speed automatic
Power: 563hp @ 5,000rpm
Torque: 850Nm @ 1,600rpm
Fuel economy, combined: 15L / 100km
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
