A rise in the British bank rate could be one the cards sooner than markets expect, a leading policymaker said on Friday.
"The evolution of the (economic) data is increasingly suggesting that we are approaching the moment when the bank rate may need to rise," said Gertjan Vlieghe, a member of the central bank the Bank of England's Monetary Policy Committee (BOE MPC).
In addition Vlieghe gave a time frame: "This may be as early as the coming months."
Growth in employment, with the jobs total of 32.14 million at a record high, and with the jobless rate at 4.3 percent, the lowest rate since 1974 indicated that pressure on wages was "gently building", said Vlieghe at the annual conference of the Society of Business Economists in London.
Consumption rates by households, a main driver for the economy, remain buoyant, despite inflation hitting 2.9 percent in August, outpacing wage growth at 2.1 percent.
"Rising real wage growth, both due to improving nominal wage growth and the expected easing back of inflation, would support consumption growth further out," said Vlieghe.
Vlieghe was looking at a time-frame covering the next two years, and reflecting on the MPC's primary aim of keeping CPI inflation as close to 2 percent as possible.
Such a statement would be significant from any member of the rate-setting MPC, but Vlieghe has so far been identified by economists and experts as a rate-rise 'dove', more likely to favor a wait-and-see approach than a rate rise.
The British bank rate is at a record low of 0.25 percent, set in August last year as an emergency response to anticipated Brexit headwinds for the British economy.
"For Vlieghe to come out and say a rate rise in the coming months would be appropriate is quite a significant thing," said Paul Hollingsworth, UK economist with Capital Economics.
"Previously you might have said Vlieghe was an obvious candidate but this is a fairly hawkish speech and given wage growth is pretty weak at the moment it is surprising to see him in that camp as well," Hollingsworth told Xinhua.
In addition to a rate rise "in the coming months", Vlieghe was also explicit that it would likely be part of a move upwards for the bank rate.
"Vlieghe suggested more than one rate rise. The fact he said that is preparing markets that this is potentially going to be the start of a sustained cycle."
Vlieghe's speech had an effect on sterling, sending the pound to its highest level against the U.S. dollar since the Brexit vote in June 2016. Sterling reached 1.36 U.S. dollars, before slipping back to just under 1.35, up 1.28 percent in the day against the U.S. dollar.
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