Bailey says inflation is still too high and the BoE is determined to get it all the way back to its 2% target. – AFPpic
The Monetary Policy Committee voted 6-3 to keep the Bank Rate at 5.25%, repeating its September decision after 14 back-to-back increases, as expected in a Reuters poll of economists. Warning against complacency, BoE governor Andrew Bailey said inflation was still too high and that the central bank was determined to get it all the way back to its 2% target.
The BoE will keep monetary policy restrictive only for long enough to “squeeze inflation out of the system”, Bailey said. “In an extremely uncertain world – including on what exactly would constitute a 'neutral' level of interest rates – there is little to gain from central banks calling the end and putting their credibility on the line should a resumption of rate rises become necessary after all,“ she said.
The central bank said it expected no growth in Britain’s economy in July-September, before expansion of just 0.1% in the fourth quarter. It forecast zero growth in 2024 and an expansion of just 0.25% in 2025.
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