IoD press release MPC makes decidedly doveish decision to hold rates at 4.25%
Commenting on the decision of the Monetary Policy Committee of the Bank of England to hold interest rates to 4.25%, Anna Leach, Chief Economist of the Institute of Directors, said:
“The MPC voted 6-3 to hold rates today as widely expected, with three members voting for a 25 basis points cut. While two-sided risks to inflation are still mentioned, the overall tone of the minutes suggests upside risks are becoming less of a concern. The minutes highlight the progress made over the past two years in bringing down inflation, but this time note a stabilisation of inflation expectations.
“Pay growth is now expected to show a “significant slowing” over the rest of the year, and beyond that which could be explained by economic fundamentals, with the labour market generally continuing to soften. And core inflation came in a little lower than the Bank expected. But overall, with the language of the MPC’s minutes sticking with a “gradual and careful”, 50 basis points of cuts this year seems the likely outturn for now.”
