BOE Keeps Open September Rate Hike Despite Falling Inflation Indicators

Dow Jones
Jul 30

1228 GMT - The Bank of England's 6-3 vote split and minutes suggest that the debate among policymakers remains centered on the risk of persistent inflation, maintaining the possibility of a rate hike later this year, KPMG economist Yael Selfin says. The key consideration for the September meeting is likely to be developments in energy prices rather than the domestic economy, she says. However, inflation has recently undershot the BOE's previous forecast, wage growth has moderated and business surveys point to softer pay settlements and inflation expectations, Selfin notes. "Together, these developments strengthen the case for keeping interest rates unchanged, with little evidence so far that the recent energy shock has led to broader, more sustained domestic inflationary pressures."

 

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