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Bank of England Monetary Policy Reports - Oral evidence
video Members of the Bank of England’s Monetary Policy Committee (MPC) will appear in front of the Treasury Committee. The session will focus on the Bank’s November Monetary Policy Report and the decision to maintain the Bank Rate at 4%. The Deputy Governor for Monetary Policy, Clare Lombardelli, and the Deputy Governor for Markets and Banking, Sir Dave Ramsden, will both give evidence. They will appear alongside two External Members, Professor Swati Dhingra and Dr Catherine Mann. The Governor, Andrew Bailey, is unable to attend due to an unavoidable international commitment. In November, the MPC voted by a ... (full story)
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At its meeting today, the Board decided to leave the cash rate unchanged at 3.60 per cent. While inflation has fallen substantially since its peak in 2022, it has picked up more recently. The Board’s judgement is that some of the recent increase in underlying inflation was due to temporary factors and there is uncertainty about how much signal to take from the monthly CPI data given it is a new data series. Nevertheless, the data do suggest some signs of a more broadly based pick-up in inflation, part of which may be persistent and will bear close monitoring. Economic activity continues to recover. Growth in private demand has strengthened, driven by both consumption and investment. Activity and prices in the housing market are also continuing to pick up. Financial conditions have eased since the beginning of the year, credit is readily available to both households and businesses and the effects of earlier interest rate reductions are yet to flow through fully to demand, prices and wages. On the other hand, money market interest rates and government bond yields have risen more recently. Various indicators suggest that labour market conditions remain a little tight. The unemployment rate has risen gradually over the past year and employment growth has slowed. However, measures of labour underutilisation remain at low rates, surveyed measures of capacity utilisation are above their long-run average and business surveys and liaison *RBA LEAVES CASH RATE TARGET AT 3.60%; EST. 3.60% *RBA: INFLATION HAS PICKED UP MORE RECENTLY *RBA: EMPLOYMENT GROWTH SLOWED *RBA: RISKS TO INFLATION HAVE TILTED TO THE UPSIDE RBA notes that while global economic risks are substantial, the effect on growth and trade in Australia’s major trading partners has so far been limited.
BoE's Ramsden: I don't rule out the worry about persistence. BoE's Ramsden: The UK stoked 2025 inflation with higher tax and minimum wage. BoE's Ramsden: The neutral rate is close to the middle of the 2-4% range.
BoE's Mann: Inflation persistence has been my key view. BoE's Mann: As we look forward, we can see that budget changes will lead to a lower inflation rate. BoE's Mann: UK firms are reluctant to reduce prices even when demand is weak BOE'S MANN: OVERALL LABOUR MARKET SITUATION IS NOT AS DIRE AS BOE SURVEYS SHOW, DUE TO PUBLIC SECTOR EMPLOYMENT BoE's Mann: The assumed neutral rate of 3.25%-3.5% is about right.
