- Prior 3.75%
- Bank rate vote 9-0 vs 7-2 expected
- Conflict in the Middle East has caused a significant increase in global energy and other commodity prices, which will affect households’ fuel and utility prices and have indirect effects via businesses’ costs
- CPI inflation will be higher in the near term as a result of the new shock to the economy
- The MPC is alert to the increased risk of domestic inflationary pressures through second-round effects in wage and price-setting
- The MPC is also assessing the implications for inflation of the weakening in economic activity that is likely to result from higher energy costs
- The Committee will continue to monitor closely the situation in the Middle East and its impact on global energy supply and energy prices
- It stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term
This is slightly more hawkish than expected considering the unanimous vote to hold the Bank Rate unchanged.
This article was written by Giuseppe Dellamotta at investinglive.com.
