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BoE's Broadbent: Rate hikes to commence when headwinds to economy die down

FXStreet (Łódź) - BoE's deputy governor Ben Broadbent said in a speech at London's Society of Business Economists on Thursday that once headwinds to UK economy dissipate the central bank will start hiking rates in a limited and gradual manner.

The BoE MPC member also suggested that rates are not kept at low levels in order to benefit the wealthy owners of risky assets but due to the current economic conditions.

"Inflation has remained broadly close to target even as real interest rates, long as well as short, have trended downwards,” Broadbent argued. “This bears out, for me, that the real task for policy is to understand - and then adapt to – economic forces affecting the natural, or equilibrium, rate of interest.”

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