• Monetary policy is very restrictive, weighing on supply capacity and investment
• No reason to disagree with market view that neutral rate is around 2.50% to 3.50%
• Tariffs could lead to a return of supply chain disruption as seen in recent years
• Broadly right to say UK has limited direct exposure to US tariffs

Do keep in mind that Dhingra is arguably the most dovish member on the committee. So, it’s important to read her remarks in that context. She was the only one who dissented back in September, voting for a rate cut. And following the 25 bps move last month, she seems to be in the camp to want another one later this month. As things stand, markets are not of the same view with a ~94% probability of no change priced in.

This article was written by Justin Low at www.forexlive.com.