IoD press release MPC make right call to hold rates at 4%
Commenting on the decision of the Monetary Policy Committee of the Bank of England to hold interest rates to 4.0%, Anna Leach, Chief Economist at the Institute of Directors, said:
“The MPC’s 7–2 vote to hold Bank Rate at 4% is the right call. With CPI inflation expected to edge up to 4.0% in September, food inflation climbing towards 5.5% by the end of the year, and elevated inflation expectations, the Bank cannot afford to ease its grip on price stability.
“November’s decision, however, will be a tricky one. Business confidence and hiring remain under pressure as we head towards a difficult Budget with a substantial fiscal hole to fill. At the same time, firms continue to face acute cost and pricing pressures following the rise in employment costs. Given the UK’s recent inflation history, the priority must remain to squeeze out any remaining price pressures.”
