Tag: MPC

UK food price inflation set to fall sharply

First, the bad news. The lowlight of the latest UK inflation data was that the consumer price (CPI) measure of food price inflation jumped even further in March – to 19.1%. This contributed about 2.2 percentage points to the overall inflation rate of 10.1%. With ‘core’ inflation still stubbornly high (over 6%), food price inflation … Continue reading UK food price inflation set to fall sharply

The MPC should now pause for breath

The Bank of England’s Monetary Policy Committee (MPC) increased UK interest rates by another half point this week, as most had expected, taking them to 4%. But it also hinted that rates may not rise much further - if at all. I think the MPC has got this about right. The decision to raise interest rates was … Continue reading The MPC should now pause for breath

Why the Bank of England was right to raise rates

Many people have been baffled by the Bank of England’s decision to raise interest rates by a historically large three-quarters of a point this week, despite forecasting that the UK economy is sliding into recession. I understand this confusion, but there are three reasons why rates had to be increased. First, the job of the … Continue reading Why the Bank of England was right to raise rates