"Until recently, financial markets had appeared to believe that, almost regardless of how the economy behaved, Brexit-related uncertainties effectively tied our hands"
In the MPC's latest meeting, McCafferty says that "more explicit guidance was redeployed" as the majority of members agreed that "some withdrawal of policy stimulus was likely to be appropriate in the coming months".
In a speech given in London yesterday, McCafferty said: "Until recently, financial markets had appeared to believe that, almost regardless of how the economy behaved, Brexit-related uncertainties effectively tied our hands until after the United Kingdom had left the European Union."
He said that this was a "misreading" which risked unnecessary surprise and therefore an "unwelcome snapback in bond yields were the policy stance to change".
McCafferty continued: "For the MPC, while Brexit uncertainties are an important consideration, we are currently facing an economy, according to our latest forecast, in which the little slack that currently remains is likely to disappear quite quickly, while inflation is projected to persistently overshoot the target.
"For a couple of members of the Committee, including myself, these considerations are already sufficient to justify a modest reduction in monetary stimulus, which is why Michael Saunders and I have been voting for a small rate rise since June. Others have been waiting for further evidence to confirm that the economy is running in line with that forecast, but their earlier fears of the risks of a sharper slowdown have diminished."
