BoE's Dhingra says her rate decision signalled economic direction

The BoE cut its benchmark Bank Rate by a quarter of a percentage point on May 8.

Bank of England Monetary Policy Committee member Swati Dhingra speaks during an event in London, Britain March 8, 2023. / REUTERS/Hannah McKay/File Photo

Bank of England policymaker Swati Dhingra said on May 19 her decision to vote for a half-point reduction in the central bank's recent interest rate decision was to make a statement on the direction of the British economy.

"I get to pick times when I want to be able to make a more categorical statement about where I think the economy is headed," Dhingra said in a podcast interview to the Financial Times.

"If I were to keep doing 100 basis points reductions, I don't think it would have as much impact on how financial markets perceive that reduction," Dhingra added. "I don't think it would be as strong as if I were to use it sparingly, and that's what I've chosen to do."

The BoE cut its benchmark Bank Rate by a quarter of a percentage point on May 8. Dhingra was one of two members, alongside Alan Taylor, on the Monetary Policy Committee to vote for a bigger 50 basis point reduction.

On May 19, Dhingra also attributed the vote to her wider view on where interest rates should be over the longer term.

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