"The most likely explanation for the apparent weak data in the run up to our May meeting was that it was a temporary, weather-related softening."
The Bank of England's David Ramsden believes the economic slowdown in Q1 which prevented the MPC from raising interest rates was 'temporary' and is now coming to an end.
During a speech in London yesterday, Dave Ramsden, deputy governor for markets and banking and member of the MPC, said "the most likely explanation for the apparent weak data in the run up to our May meeting was that it was a temporary, weather-related softening".
He added that "the period of unusually subdued growth in wages appears to be coming to an end" and unit labour costs have been rising towards growth rates consistent with overall inflation at target.
Ramsden said that looking ahead, his expectation for the economy is "in line with the MPC’s best collective judgement as expressed in our inflation report forecasts".
The May Inflation Report predicts roughly three rate rises over the three year forecast, and Ramsden said "so far at least our May judgement looks on track".
He concluded: "Global growth still looks solid, albeit a bit less rosy than it did before. The labour market is still robust. I expect GDP growth to resume at a steady but unspectacular pace, and demand to continue to rotate away from consumption and towards trade and investment. Of course all this is conditional on a smooth transition to the eventual post-Brexit arrangements.
"I signed up to the Committee’s collective judgement that 'were the economy to develop broadly in line with the May Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to its target at a conventional horizon'."