Bank of England holds rates flat with MPC split following inflation drop
The MPC voted by five members to four to hold at 5.25%
The MPC voted by five members to four to hold at 5.25%
CPI at 6.7% on an annualised basis versus forecast of 7.1%
The slide was much greater than forecasts of 0.2%
The Bank hiked by 0.25% to a rate of 5.25%
The 21-month transition deal agreed between the UK and European Union is a welcome step but leaves unanswered questions regarding Brexit’s impact on UK businesses, industry figures have warned.
The Bank of England has increased interest rates for the first time in a decade, reversing the 0.25% emergency cut implemented in the aftermath of last year’s Brexit referendum.
Interest rates remain unchanged at a historic low level of 0.25% following the latest Bank of England meeting, quashing rumours higher inflation could spark a hike this year.
Uncertainty over the future of the UK’s Brexit negotiations tempered Bank of England forecasts published on Thursday (11 May).
In this week’s edition of the podcast, labour economist and former Bank of England MPC member, David “Danny” Blanchflower discusses why we appear to be in a period of ‘stuckflation’ and what can be done to get the global economy out of it.
The Bank of England eschewed any great fireworks today, releasing the doves instead.
Aside from revising growth lower and putting an end to sterling’s election-led rally, The Bank of England’s May inflation report once more placed the spotlight firmly on productivity growth as the possible bad apple that could upset the whole cart.
Inflation should return to its 2% target within the next two years, the Bank of England said on Wednesday, but labour productivity remains the key uncertainty, as it downgraded its forecast for UK GDP growth from 2.9% for 2015, to 2.5%.