England Bank in London.
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England Bank’s voice to maintain interest rates on Thursday, with sticky inflation in the UK with unconfirmed growth expectations.
The MPC (MPC) was voted by 7-2 to maintain fixed rates of 4 %. The last time the central bank reduced the main interest rate by 25 basis points in August.
While the economists did not expect to reduce the interest rate in September, they were excited to see the vote division and directives from the central bank to obtain evidence about what MPC might do at its next meeting in November.
Economists said in a note before the decision: “The possibility of a reduction in the month of November in the balance, and this meeting will be severely examined for hints on whether officials are still considering more mitigation this year.”
The last MPC decision comes after a day after inflation data in the UK showed that there is no change in the rate of price height in August, With the consumer price index remained by 3.8 %.
The basic inflation increased in August, which excludes more volatile prices for energy, food, alcohol and tobacco, by 3.6 % annually, compared to 3.8 % in the twelve months to July. The annual inflation rate of services slowed from 5 % in July to 4.7 % in August.
The Bank of England expected that inflation could reach 4 % in September, and its target doubles by 2 %, before declining in early 2026.
It was also implemented by the previous one Reduce the interest rate In August, the Central Bank reiterated its slogan that it would take a “gradual and accurate” approach to cash dilution and recognition of inflationary pressures, but it is aware of the need to enhance growth and investment.
The latest monthly growth data showed that there was no zero growth in July, compared to the previous month, Fear fears that the slowdown is in a position in. The Bank of England is also aware of the market of cooling function and slow wage growth, which will reduce inflationary pressures and can enhance the argument to reduce additional prices in the coming months.
There is a state of wide uncertainty about the government’s budget on November 26, and it is possible that Finance Minister Rachel Reeves will announce a set of tax increase to eliminate budget deficiency Because it looks forward to balancing books and reducing borrowing. The Enabels Bank meeting comes in November 6 – before the budget was announced.
No sudden movements
Economists say that the Bank of England will want to see more evidence that the basic services and inflation are on a landfill before dilution.
“The good news is that inflation data in August had corrected some of the upscale surprises that we saw last month. The bad news is that the consumer price index may be just beyond that before it reaches its peak.”
Raja noted that although there are some parts of the encouraging information in the latest inflation report, “we will need to see more of this Bank of England to reduce the bank rate again.”
Deutsche Bank expects to see a slightly longer stop when it comes to moving the next rate in BOE.
“For us, MPC may want to wait for a larger accumulation of evidence before contacting the restriction policy again. Seeing the downward trend in CPI Begin can reduce fears that the hump in inflation does not turn into a plateau.”
“Reducing premature interest rates may lead to confirming expectations,” Nabil Talib, the economist in PWC, said in a note on Wednesday.
“As a result, the bank is likely to remain cautious: the weight of weak growth and the mild labor market against the need to establish inflation expectations, indicating any discounts as gradual adjustments instead of rapid shift towards motivation.”
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