BOE cuts bank rate by 25 bps to 4.75%, as expected
BOE cuts bank rate by 25 bps to 4.75%, as expected
Prior 5.00%Bank rate vote 8-1 vs 7-2 expected (Mann dissented to keep bank rate at 5.00%)There has been continued progress in disinflationBut domestic inflationary pressures are resolving more slowlyMost of the remaining persistence in inflation may dissipate quicklyThis as pay and price-setting dynamics continue to normalise following the unwinding of the global shocksThe combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s timeThere remains significant uncertainty around the outlook for the labour marketData are difficult to interpret and wage growth has been more elevated than usual relationships would predictA gradual approach to removing policy restraint remains appropriateMonetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated furtherTo monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meetingFull statement
This article was written by Justin Low at www.forexlive.com.
Bank rate vote 8-1 vs 7-2 expected (Mann dissented to keep bank rate at 5.00%)
There has been continued progress in disinflation
But domestic inflationary pressures are resolving more slowly
Most of the remaining persistence in inflation may dissipate quickly
This as pay and price-setting dynamics continue to normalise following the unwinding of the global shocks
The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time
There remains significant uncertainty around the outlook for the labour market
Data are difficult to interpret and wage growth has been more elevated than usual relationships would predict
A gradual approach to removing policy restraint remains appropriate
Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further
To monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting
