Two years ago, the Bank of England was the first major central bank to pull the interest-rate trigger. In the next cycle, it’s set to be more of a follower than a trailblazer. With inflation proving stickier in the UK than elsewhere, the Old Lady of Threadneedle Street looks set to stubbornly resist pressure from a slowing economy to change course and lower borrowing costs next year.

Thursday's Monetary Policy Committee meeting is unlikely to move the dial on interest rates. There’s an entrenched split on the nine-member panel; the three hawks, comprising Jonathan Haskel, Megan Greene and Catherine Mann, voted at the previous two meetings to raise the official rate by another 25 basis points from the current 5.25%, with the remaining six members wanting unchanged policy. There’s been little economic news since then to change the thinking of any policymaker. I expect to see the phrase “monetary policy is likely to need to be restrictive for an extended period of time” wheeled out again in this week’s statement.

QOSHE - Bank Of England Dawdles at the Back of the Rate-Cut Pack - Marcus Ashworth
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Bank Of England Dawdles at the Back of the Rate-Cut Pack

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12.12.2023

Two years ago, the Bank of England was the first major central bank to pull the interest-rate trigger. In the next cycle, it’s set to be more of a follower than a trailblazer. With inflation proving stickier in the UK than elsewhere, the Old Lady of Threadneedle........

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