Bank of England Monetary Policy Committee member Jonathon Haskel said on Tuesday that the path of interest rates is upwards, according to Reuters. Haskel noted that a rise in rates to above emergency levels should be seen as a symptom of the economic recovery and that he is optimistic about the outlook for a recovery in UK productivity. 

If monetary policy is too accommodative, he continued, we may have a problem with second-round inflation effects and we are trying to be vigilant to understand if the labour market is persistently tight. We need to see clear evidence of both a recovery in the size of the economy and on strength of the labour market before raising rates. 

Market Reaction

Haskel's comments might be interpreted as dovish given that he mentioned how clear evidence of a recovery in the size of the economy was also a condition for rate hikes, rather than just clear evidence of a tight labour market. Some might see this as Haskel raising the bar for a first 15bps rate hike in December. 

Nonetheless, GBP/USD has not reacted to Haskel's comments and continues to trade lower by about 0.3% on the session in the 1.3350 area.