BOE's Saunders says neutral is somewhere in range of 1.25-2.50%

  • That's a wide range
  • Levels of interest rates below 1.00% are clearly below neutral in UK
  • It's possible that UK interest rates might need to go above neutral if inflation expectations go higher, but that's not my central scenario

The pound is overwhelmingly concerned about flagging growth rather than rate differentials.

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