BOE's Forbes Says U.K. Economy May soon Need a Rate Increase

Right after Forbes' comments were published the pound jumped higher.

Bank of England policy maker Kristin Forbes said if the U.K. economy continues on its current trajectory, accelerating inflation may push her to vote for an interest -rate increase.

Employment and overall output have shown resilience since the Brexit vote, and the acceleration in price growth fueled by the pound's drop and increasing energy prices means the central bank should be moving toward tighter policy, Forbes said in the text of a speech published Tuesday.

" I am beginning to grow uncomfortable with the trade-off embodied in our current forecast," she daid, referring to the BOE's balancing of economic growth and inflation concerns. " If the real economy remains solid and the pickup in the nominal data continues this could soon suggest an increase in bank rate"

The BOE kept its key interest rate at a record-low 0.25% last week, and the Monetary Policy Committee said policy makers have limited tolerance for inflation above their 2% target. Some said they are " closer to those limits" and Forbes's comments mark her out as one of those officials growing increasingly concerned about price growth.

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