Yael Selfin, Chief Economist at KPMG UK comments on Bank of England’s MPC announcement
Commenting on today’s Bank of England’s Monetary Policy Committee decision to hold interest rates unchanged at 0.25% by 7-2 vote, Yael Selfin, Chief Economist at KPMG, said:
“With the latest unemployment figures suggesting that the UK labour market has reached a simmering point, and the recent jump in inflation meaning it will likely remain well above target for the next few years, you would expect the Bank of England to act.
“But, the meagre wage growth we are seeing in spite of these trends is making it harder for the Bank of England to raise rates, especially as any rise will put yet more pressure on households who are already under strain due to a fall in their real earnings.
“With so much current uncertainty surrounding the EU exit negotiations, the Bank is likely to tread with extra caution. Developments in the negotiations over next month are likely to firm up expectations for the course of the exchange rate and for the wider economy over the next year, and will form a crucial factor in influencing the date of the first UK interest rate rise since 2007.”
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