Bank of England’s Weale Changes Position Following Weak UK Data, According to Reuters

LONDON (Reuters) – Martin Weale, a policymaker at the Bank of England, has expressed a changed perspective on the economic outlook following the release of unexpectedly weak British purchasing managers’ data. This comes just a week after he stated that he required more solid evidence before supporting an interest rate cut.

In an interview with the Financial Times, Weale did not explicitly confirm whether he would endorse a rate cut at the Bank’s upcoming policy meeting on August 4, which will be its second gathering since the Brexit vote. However, he remarked that the purchasing managers’ data released on Friday, indicating the most significant contraction in the services and manufacturing sectors since the 2008-09 financial crisis, was “a lot worse than I had thought.”

Weale noted, “I see things rather differently from what I would have done had we not had those numbers.” He underscored that these data points were gathered after July 12, following the initial shock of the referendum. He had previously indicated a desire for more information and consideration, and he believes the recent data has provided that, despite the absence of a clear signal.

The Bank of England surprised financial markets in July by refraining from rate cuts for the first time since 2009. However, the minutes from that meeting suggested that most policymakers anticipated supporting an unspecified series of measures aimed at stimulating the economy in August.

Weale previously stated that he did not believe the case for looser monetary policy was clear-cut and stressed that the Bank should not be swayed by market volatility.

Having served on the Bank’s Monetary Policy Committee for six years, Weale will conclude his term following the decision next week. He commented on Mark Carney’s tenure as governor starting in 2013, noting that it led to a heightened focus on financial markets, which he questioned whether it was beneficial.

Weale articulated uncertainty regarding the significance of immediate financial market movements, pondering if these reflected strong material signals or if they simply provided ongoing topics for discussion since financial markets are always active.