Split Vote at Bank of England

June 16, 2022

In the wake of the Fed’s larger rate hike, some analysts had speculated that the Bank of England’s scheduled policy review yesterday and today would result in a bigger rate increase than the four previous 25-basis point moves, and three of six policymakers voted for a 50-bp hike, but the majority stuck with an incremental change of +25 basis points to 1.25%. More increases lie ahead, and the significant number of dissenters may indeed be flagging a coming shift to larger incremental changes.

Not all of the excess inflation can be attributed to global events. There has also been a role for interactions with domestic factors, including the tight labor market and the pricing strategies of firms. Consumer services price inflation, which is more influenced by domestic costs than goods price inflation, has strengthened in recent months. In addition, core consumer goods price inflation is higher in the United Kingdom than in the euro area and in the United States.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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