BoE tightens by 50bp as inflation set for sharp fall
Forecasts imply Brexit, pandemic and energy prices will cause long period of weak productivity
The Bank of England raised its policy rate 50 basis points to 4% today (February 2), despite publishing forecasts predicting below-target inflation as soon as 2024.
Seven members of the monetary policy committee supported the rate increase and two voted to hold. MPC members also dropped a hint that rates may have hit their peak.
Today’s new forecasts by the BoE are more optimistic on growth than the previous forecast round, in November. Even so, the forecasts imply it could take until 2026 for
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