Quantitative tightening - the next chapter
Speech by Sir David Ramsden, Deputy Governor for Markets and Banking of the Bank of England, at the Bank of England, co-hosted by the Money, Macro and Finance Society, London, 28 September 2026.
Ramsden gives a hawkish direction by saying inflation risks are "skewed to the upside" and that, if pressures persist, "there could be a case for raising Bank Rate"; however, he presents this as a conditional possibility and supports holding for now, so the score was kept moderately hawkish.
Summary
BoE Deputy Governor Dave Ramsden explained the MPC's decision in September 2026 to move from an annual approach to QT to a multi-year path: running down the stock of gilts held for monetary policy purposes entirely by the end of 2034 through annual sales and redemptions of 20 billion pounds, holding 120 billion pounds as backing for banknotes, and considering sales to the Treasury rather than the market. He stressed that Bank Rate remains the active policy tool and that the effect of QT on yields is relatively limited. He said he supported holding Bank Rate at 3.75 percent; having expected cuts before the Middle East conflict, the current holds effectively amount to tightening. He said risks to the inflation outlook are skewed to the upside and that, if upward pressures continue to build, a case for raising rates could emerge.
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Model: claude-code/opus · prompt version 2
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BoE (Bank of England) · United Kingdom
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