Bank of England’s Shafik says 2016 rate cut will hinge on data

Bank of England Deputy Governor Minouche Shafik delivers a speech at a financial markets event in the City of London, in London, Britain September 28, 2016. REUTERS/Toby Melville

Bank of England Deputy Governor Minouche Shafik said the chances of a further interest rate cut by the British central bank this year would hinge on the strength of incoming economic data.

Shafik said in a speech on Wednesday that a further loosening in monetary policy would probably be needed “at some point” but did not repeat language the central bank used earlier this month which pointed to a rate cut this year.

Asked after her speech if a rate cut was possible at the BoE’s next rate meeting in November, Shafik said: “If we have data prior to that which signals that stimulus is needed, we will obviously act on that.”

Any changes to the government’s fiscal policy – which will only become clearer later in November – would also be important, Shafik said, and she added that the longer-term economic outlook still pointed to a slowdown.

“I would much rather be on the front foot and act preemptively…than be on the back foot and do too little too late,” she said.

(Reporting by David Milliken and Peter Hobson; editing by William Schomberg)