Aggressive hike is not warranted as the Thai economy is still in the early phase of recovery, while it could risk derailing the recovery. A gradual approach is needed to strike a balance between facilitating a smooth take-off of the recovery and minimizing the impact from potential bumps. • Measured: Policy decision will be calibrated taking into account economic conditions and circumstances prevailing at the time. If a pause is required, we will pause. If 50 bps is necessary to meet our policy objective, we will raise 50 bps. But with the current circumstances, aggressive rate hikes or too early withdrawal of financial measures can jeopardize the economic recovery given pockets of vulnerabilities and the uneven impacts on different groups. c. We have taken first steps towards this at the Financial Institutions Policy Committee (FIPC) meeting on June 30th and the Monetary Policy Committee (MPC) meeting on August 10th. • The FIPC decided to withdraw some of the blanket-type measures including FIDF fee cut and bank dividend payment restrictions. • The MPC voted 6 to 1 to raise the policy rate by 25 bps. Part 3: What is our rationale for monetary policy normalization? [3.1 MPC decision: 10 August] Two weeks ago, the MPC has delivered the first policy rate hike after having held the policy rate at its historically low level for more than two years.
29  All speeches are available online at www.bankofengland.co.uk/speeches  29  Chart 17: Firm level productivity distribution over time  (a) Levels  (b) Index GVA per person, £  GVA per person, Index 2002 =100 180  140 10th percentile 50th percentile 90th percentile  25th percentile 75th percentile  10th percentile 50th percentile 90th percentile  120  25th percentile 75th percentile  160  140  100  120  80  100  60  80 60  40  40 20  2002  2004  2006  2008  2010  2012  0 2014  20 2002  2004  2006  2008  2010  2012  0 2014  Source: ONS Research Database and Bank calculations. Notes: Productivity per worker. Chart 18: Productivity among Frontier and Non-Frontier companies  Source: ONS Research Database and Bank calculations. Notes: Frontier defined as top 5% of firms by GVA per worker in a given year and sector as defined by 2-digit SIC 2007 industrial classification. 30  All speeches are available online at www.bankofengland.co.uk/speeches  30  Chart 19: Contribution of frontier and other firms to productivity growth  Source: ONS Research Database and Bank calculations. Notes: Frontier as defined in Chart 18. Chart 20: Productivity dispersion*  (a) Services (Levels)  (b) Manufacturing (Levels)  (a) Services (Index)  (b) Manufacturing (Index)  Source: OECD and Berlingieri, Blanchenay and Criscuolo (2017, forthcoming); ONS Research Database and Bank calculations.