In the News
UK inflation and interest rates - a quick update

14th September 2022
The latest inflation figures suggest a slight dip in inflation - to 9.9% - but rising costs are eating into household budgets.
Even given the recent action on energy prices, some analysts think that inflation has yet to peak, because despite the fact that petrol prices are falling, food prices and service sector inflation is still rising.
Against this background, whither interest rates? The runes would suggest that the Bank of England is going to continue to tighten monetary policy.
However, whilst there's considerable debate about the efficacy of this, other factors are also in play, notably the recent depreciation of the pound. And it is this that leads many to believe that rates will rise, if only to try and protect the currency from further depreciation.
All of which makes life interesting: what does the 1998 Bank of England Act state that interest rate decisions should be predicated upon?
Bank of England will not take foot off throttle despite drop in inflation https://t.co/3mFHbLLL7a
— Guardian Business (@BusinessDesk) September 14, 2022
My Times piece today: Neither the slight dip in inflation, nor the energy price freeze, will stop the Bank of England raising rates much more, starting next week:
— David Smith (@dsmitheconomics) September 14, 2022
David Smith: The Bank’s in a tight spot, meaning the only way is up for interest rateshttps://t.co/oPD9xfHcBo
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