Bank of England Deputy Governor Clare Lombardelli said she would not rule out casting a vote in favor of another rate rise in December, but stressed she does not yet have the evidence required to make that call, in an interview published on Tuesday.
Lombardelli was part of the 8-1 majority that last week approved a rise in Bank Rate to 4% from 3.75% - the first increase since August 2023. At the time of the decision, she indicated a further hike was likely to be needed in the near term, according to the minutes of the meeting.
Discussing the potential for a December move, Lombardelli said policymakers would need to see how several factors evolve before committing. "I think it depends what we see on the conflict and the energy prices and it depends what we see in the wider data and how all that fits together," she told the Guardian. "But I wouldn’t rule it out. Equally, I don’t have enough information just yet."
Her remarks linked the Bank’s next steps directly to developments in the Middle East and to the path of energy costs, as well as to upcoming economic indicators. Those elements, she said, would shape whether an additional tightening is warranted.
Lombardelli also highlighted strain in the domestic labour market, noting that younger workers are bearing a disproportionate share of the impact from what she described as a "low-gear economy." She said employers are holding back from hiring amid the fallout from the war in the Middle East, producing a pattern she labelled "low-hire, low-fire." "So a labour market where you’re seeing a real fall-off in hiring. But actually, we’re not seeing much in the way of redundancies. What’s going on is this kind of low-hire, low-fire dynamic," she said.
Those observations were set against fresh survey evidence pointing to cooling in the jobs market. A Recruitment and Employment Confederation and KPMG survey published on Monday found hiring for permanent roles fell in October for the first time in four months. That survey was released days after the Bank of England raised rates.
Context and implications
Lombardelli framed the Bank’s near-term policy calculus as conditional on international conflict dynamics, energy price movements and incoming domestic data. She emphasised that while another increase remains on the table, a clear view of these variables is necessary before she would commit to voting for it.
The comments underscore the Bank’s sensitivity to geopolitical risk and energy shocks as well as to signs of a cooling labour market, particularly for younger workers. They also reflect the committee’s approach of weighing evolving data against previously signalled intentions.