The Bank of England’s nine member Monetary Policy Committee (MPC) voted by 6-3 to stick with the Bank Base Rate at 5.25% today in their midday announcement.
Since the last MPC decision on September 21 experts have debated whether the committee’s decision would be to ‘stick or twist’ at November’s meeting, given the conflicting signals coming in all economic data released in that intervening period.
Falling inflation data has stalled, while oil prices have risen during the current Middle East conflict; wages growth have continued to outpace inflation and GDP data indicating the health of the economy has stayed positive in Q3 but is forecast to deteriorate in Q4 2023.
Mandated to control inflation to a 2% target, the MPC raised interested rates consistently over a prolonged period in an effort to achieve this.
Commentators had forecast today’s decision to hold rates in light of macro global events, a deteriorating forecast of performance of the UK economy and the knock on effects for millions of small businesses and families, who would be adversely affected by a further increase in borrowing costs alongside persistent inflation levels.
The next step in this debate for economists and experts is over how long interest rates will remain at these levels, if it plays out that we are now at the peak of the current rate cycle?
Mark Grant, Managing Director – UK, Fiducia Commercial Network
