Overview
The Bank of England’s (BOE) latest monetary policy statement, interest rate decision, and minutes reveal a continued effort to combat inflation while fostering economic growth and employment.
Interest Rates and Inflation
Over the past two years, the BOE has progressively raised interest rates to curb inflation. This approach appears effective, as inflation in the UK has decreased from a peak of 11% in 2022 to 4% by December 2023. However, inflation still exceeds the BOE’s 2% target, necessitating further measures to ensure a sustained reduction.
Monetary Policy Committee’s Decision
The Monetary Policy Committee (MPC) voted 6–3 to keep the Bank Rate at 5.25%. While two members favored a 0.25% increase to 5.5%, one member advocated for a decrease to 5%. The MPC’s projections, conditioned on a market-implied…
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