Bank of England must move gradually on rates after budget, Bailey says
LONDON, Nov 19 (Reuters) -The Bank of England needs to move gradually with any further reductions in interest rates as it waits to see how the impact of tax changes in the government's budget play out, Governor Andrew Bailey said.
Bailey said in a report to parliament published on Tuesday that a rise in social security contributions that employers must pay "represents an increase in the cost of employment" which could lead to higher prices, less hiring or other outcomes.
"A gradual approach to removing monetary policy restraint will help us to observe how this plays out, along with other risks to the inflation outlook," he said.
Bailey and other top officials were speaking to the Treasury Committee in the lower house of parliament on Tuesday.
The BoE lowered its benchmark rate to 4.75% from 5% earlier this month and said at the time that it would move gradually with further cuts.
Reporting by Andy Bruce
Writing by William Schomberg
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