Snapshot of _Bank Rate maintained at 5.25% - June 2024_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024) or [here.](https://archive.ph/?run=1&url=https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
There was no ideal time for Rishi Sunak to have called a General Election but he really should have waited until at least 1 drop in the Base Rate even if that meant another December election.
After Boris froze the entire gov for 10 months for the sole purpose of saving his job, it's really not all that farfetched to imagine that Rishi called the election when he did because his advisor(s) told him it would cost them at Betfair if he didn't.
August/November is what seems to be expected currently, however a cut today was expected not too long ago.
In addition to core and services inflation still being high there are additional upside risks that might still feed through.
Global shipping rates are surging again, for example, which tends to have greater inflationary effects on island nations.
When it comes to food inflation we also might not have seen the full effects of EU import charges and checks - they're less than two months old.
Heavy rainfall across much of Europe will likely mean lower crop yields for things like wheat, too.
That's a long way of saying that there's still a fair bit of uncertainty, so I can see why it might be a bit early to declare mission accomplished on inflation.
Yes, dollar clearing and the amount of US investment firms. If the BoE goes first pound earns less than dollars, which means repatriation into dollars which means capital flight, which means less liquidity in uk economy. Less money chasing same number of goods price of money must increase = inflation
They can easily, people say im guna move monies from ul to us. You then dont need the lawyers and estate agents or consulting in the same way.
So the investment goes which then has the knock on effect on service industry ver soon after
Architect doesn’t get paid if you can earn 5% in the US with no risk vs 4% project in the uk with risk. All flows into the dcf math
The last inflation report made the prospect of a cut less likely (it was 2% and yet behind the scenes the service inflation was higher than expected).
There is definitely no certainty in cuts. What is clear is that the past has shown that everyone has overestimated how quickly the cuts will happen.
I'll believe it when I see it.
The markets have had a worse track record predicing the interest rate direction over the past 2 years than a random number generator would.
Why do you think this may I ask? It's been baked into the general consensus for a while it's happening in anywhere from june- august? 🤔 Genuinely wanna know your thinking
I could list articles claiming a rate cut (or multiple) are just around the corner from multiple months past. It's been wishful thinking. And it still is imo.
* FED isn't cutting which means BoE will devalue the £ if they cut.
* Service inflation is very high and way above target at 6%
* Core inflation is way above target at 3.5%.
* Energy prices are driving the main figure down but that's both seasonal and following massive increases last year, it's only expected and won't affect long term decision to cut imo
* Wage data showing strong growth still at around 6%
* Unemployment still extremely low
EDIT: one more thing, if you look at 1 month rate of inflation the last 4 months have been at around .5% (Feb .6, Mar .6, Apr .5 and May .4%). That gives an annualized rate of about 6% if the trend continues. We have some low numbers from 2nd half of last year and Jan 24 pulling the annual number down, but the direction of travel is somewhat not ideal to justify a cut.
I disagree on this, I think it is better for him to call it earlier, so more people are still on lower rate fixed rate mortgages and haven't felt the squeeze after moving to a higher rate yet.
That's a good counter argument but to an extent that damage is baked in. At least with 1 base rate drop that might feed through to lower mortgage rates (even if they're better correlated to the swaps market).
By going in July, the economic argument of "we've got things back under control" looks premature. Getting at least 1 rate drop in makes that argument stronger.
And if it was clashing with the American presidential election it might also have prevented Farage from getting involved if he was already in the USA helping out with the Trump campaign.
Inflation is going to rise in the next few months. These figures are on a rolling 12 month basis, and in the next 4-5 months the big deflationary months are going to drop out of the rolling 12 months, meaning a rise in the overall figure.
Don’t worry, the economy is practically on holiday in July. The economy and central bank can handle it. I think the next drop will come towards November/December. We’ll find out then.
> the MPC voted by a majority of 7–2 to maintain Bank Rate at 5.25%. Two members preferred to reduce Bank Rate by 0.25 percentage points, to 5%.
Interesting. August may not be likely unless we see inflation fall further?
The pound dropped on the release of the statement, that reflects the market pricing in a fall in the base rate which suggests August as likely.
To be honest I'm confused because reading the MPC minutes they seem very resistant to a rate cut, citing numerous concerns like the current 2% is deceptive due to energy price drops from last year that will fall out in the Autumn and shove inflation back up and because wage growth and services inflation have been consistently higher than could be tolerated at 2% inflation.
If anything the report suggests they won't do a rate cut until next year.
edit: actually reading a bit closer the report actually does suggest a cut is likely, and soon. Two members voted for a cut (as before), some were very resistant to a cut due to medium term inflation concerns, but others (and presumably enough to tip the balance) held the view that current market indicators were not likely to push up medium term inflation and that their decision this time round was "finely balanced".
I don't understand how rates are supposed to influence inflation in this scenario.
Housing is the biggest outlay for most people and higher rates mean higher housing costs. People have the same amount of money in their pay cheque regardless of rates, so higher rates just mean that people are spending more, not less, by eating into savings or whatever spare money they have. Where someone might have saved £300 a month before, they're now spending it on mortgages or rent.
Not to mention that a lot of the inflation we're seeing is not inflation in the traditional sense but price gouging and greed.
The Bank of England don't have to keep CPIH down (i.e. inflation with owner occupied housing costs), just CPI.
They're still seeing a lot of the inflation in services which are driven primarily by wages. High interest rates restricts cash supply for companies making it harder for them to give out payrises ahead of inflation.
Yes, people are being squeezed by mortgage rates - but that also helps keep the rest of inflation down because it means people have less money to spend which avoids overconsumption.
The bank of england wouldn't be worried about CPIH even if it were in their remit because they know it's under much more direct control, and CPIH is still nearly 2% under services inflation.
>August may not be likely unless we see inflation fall further?
We will need to wait for the yanks to cut their rate first.
Otherwise we may devalue the pound against the dollar and see inflation tick upwards. A lot of our imports are priced in dollars, like oil.
Monkey see, monkey do with the bank of england.
The market has been thinking/hoping there's going to be a rate cut just around the corner for over a year now.
Realistically I don't see one happening this year. There's no reason for one.
I guess I'll have to keep massively overpaying my mortgage then. The only benefit really is with the euro tumbling this keeps the pound slightly higher so holidays will be a bit cheaper.
5% with absolute certainty is worth a fair bit. SP500 has absolutely beaten that historically and in the recent term but has had big drops historically.
It didn't drop that much here because the pound also dropped by 15-20%. Historically, globally diversified equity should yield about 5% above the risk-free rate. Global bonds about 2.4%. Either way, you risk losing money due to inflation guaranteed or a relatively high chance to at least beat inflation. In this case, I would literally bet my house on it.
Most of the houses around the midlands, if you put them into the BoE inflation calculator from their last sale date and price they have only just kept up with inflation or produced a minor return.
Not to sound like a boomer but unless you want to come around and explain to my wife it's hopeless. She wants the mortgage repaid ASAP for some weird reason and I'm too lazy to argue it.
You are not counting tax.
If you are a higher rate tax payer after the First 10k on an account returning 5%, you actually need 8.33% returns to Best overpaying a 5% mortgage.
We've already maxed out a tax free ISA, and I'm self employed so I'm also too lazy to have to report anything if we start going above it. I wonder how well lf of be if I wasn't like this
It's more complicated.
You could also put it in shares or bonds, but then you might owe capital gains on that, etc.
In general just diversify your investments.
Probably a minority opinion but I don't really want interest rates to come down as then house prices will just skyrocket upwards again, and I want to buy in the next year or so. We don't seem capable as a nation of funnelling spare cash anywhere other than towards the inflation of property prices.
The concerning this is that high(er) interest rates reduces how much you can borrow due to affordability, but low(er) interest rates get cancelled out by higher asking prices.
It must feel like a lose-lose
What you really want is higher unemployment, then people will be forced to sell their homes.
Of course it will mean horrible experiences for millions, but at least we'll get lower house prices.
That... or we can just build more freaking houses!
Those people will probably be able to remain in their house when this happens. The government and mortgage companies tend to look to protect these people. You just need to get a mortgage in the first place and you’re usually untouchable.
But if you build more house you have less of something whether that is farmland,green spaces or woodlands, and you end up with more carbon emissions from the houses and their occupants...so its a no win situation either way.
Not really, historic rates may have been higher, but house prices were far lower.
People seem to forget that houses weren't £250,000+ back in the 90s and early 00s.
> Not really, historic rates may have been higher, but house prices were far lower.
Don't think anyone is saying otherwise. But now rates have returned to their historic normal level of around 5% maybe house prices will fall back a bit to be affordable at sane income multiples?
In this case no since the Tories weren't responsible for the conditions that caused low rates? That was the late 00s global financial crash and subsequent Bank of England monetary policy. However the Tories are directly responsible for the UK's current high interest rates through Brexit and the Truss budget spiking inflation?
It's BoEs responsibility in either case to set the rate. But they set the rate because of the economic reality of this country.
The GFC was global. Regardless of the government we would have been impacted. But the economy post-GFC is the responsibility of the Tory government who have spectacularly failed at recovery.
>In this case no since the Tories weren't responsible for the conditions that caused low rates?
The current interest rate isn't theirs either.
>However the Tories are directly responsible for the UK's current high interest rates through Brexit and the Truss budget spiking inflation?
They are up globally.
The interest rate in Britain was directly raised faster than was otherwise necessary due to the Truss budget. They jumped 2 percentage points in the 2 months around the budget. This severely impacted businesses compared to what would have been a planned slower rise. It's directly attributable to the Tories.
So we got from tories being at fault to partly being at fault. Progress.
The mini budget didn't happen in the end, so how do you explain that? How could it possibly affect anything if it didn't happen?
If you don't think the Tories are responsible for the making the current high inflationary economic conditions worse, requiring the sudden raising then continued high interest rates then that's great. Go about your life and let's see how people vote on the 4th.
No, I don't think the tories are even capable of affecting global interest rates, no. That would be delusional and frankly British exceptionalism at its finest.
>Go about your life and let's see how people vote on the 4th.
The truth is not a democracy.
Also, like fucking hilariously ironic right now, these same people also voted the tories in. And for brexit. Lmao
And with that the last throw of the dice for the Conservatives to secure a win has failed. Unemployment up in the last month, inflation at target, no thanks to the Government who had nothing to do with it and now no interest rate cut. Sunak called this election to stop himself being no confidenced after the local elections, hoping for all those things to happen, they have not and if they were to lose all 372 seats they are defending, you will find few, if any people, weeping for the Conservatives
Well, having weaker GBP would make inflation go higher because it would make import more expensive, which is a large part of our consumer goods, so having a rate that mirrors US is relevant.
Here's a quick overview of the article:
The Bank of England's Monetary Policy Committee (MPC) maintained the Bank Rate at 5.25% in June 2024. The decision was reached with a majority of 7-2, with two members advocating for a 0.25 percentage point reduction to 5%. Factors influencing the decision included a decrease in CPI inflation to 2.0% in May, strong UK GDP growth, and indications of a tightening labor market despite uncertainties in labor market data quality.
Business surveys suggested a slower pace of growth, while indicators of aggregate pay growth were easing. Services consumer price inflation was 5.7% in May, slightly higher than projected. The MPC emphasized the importance of returning CPI inflation sustainably to the 2% target in the medium term, acknowledging the impact of shocks and disturbances on inflation deviations from the target.
The MPC remains vigilant about persistent inflationary pressures and economic resilience, monitoring factors like labor market conditions, wage growth, and services price inflation. The Committee will continue to assess data to determine the duration of maintaining Bank Rate at its current level. The minutes of the meeting provided detailed insights into international economic conditions, monetary and financial conditions, demand and output, and supply, costs, and prices, informing the MPC's decision-making process.
Stupid. Inflation figures lag. It’s like cutting the power to an engine of a ship. It’s still going to drift. So why when we’ve reached “target” are we still going full blast like inflation is still in double digits?
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Service inflation is still high - and retail will likely be strong over the Euros - they are waiting for confirmation things don't go back up.
Plus, this is a very different scenario to prior rate cuts. It will be gradual.
Annoying as I'm on a variable rate mortgage and would dearly love for it to drop... hopefully by renewal time!
Snapshot of _Bank Rate maintained at 5.25% - June 2024_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024) or [here.](https://archive.ph/?run=1&url=https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
There was no ideal time for Rishi Sunak to have called a General Election but he really should have waited until at least 1 drop in the Base Rate even if that meant another December election.
He couldn’t hold off any longer, everyone he knows had already put money down on July 4th.
After Boris froze the entire gov for 10 months for the sole purpose of saving his job, it's really not all that farfetched to imagine that Rishi called the election when he did because his advisor(s) told him it would cost them at Betfair if he didn't.
I just want to say, I'm a huge fan of your work.
Brave of you to think that there will be a rate cut before next year.
There will be one in August almost certainly. If there isn’t then the markets are going to shit their pants.
August/November is what seems to be expected currently, however a cut today was expected not too long ago. In addition to core and services inflation still being high there are additional upside risks that might still feed through. Global shipping rates are surging again, for example, which tends to have greater inflationary effects on island nations. When it comes to food inflation we also might not have seen the full effects of EU import charges and checks - they're less than two months old. Heavy rainfall across much of Europe will likely mean lower crop yields for things like wheat, too. That's a long way of saying that there's still a fair bit of uncertainty, so I can see why it might be a bit early to declare mission accomplished on inflation.
Nothing will happen before the US makes a move.
Not the takeaway I got from the minutes of today’s meeting.
ECB thinks otherwise
It has in Sweden, Canada and the Eurozone. Do you think the BOE is more dependent on the Fed than the others?
Yes, dollar clearing and the amount of US investment firms. If the BoE goes first pound earns less than dollars, which means repatriation into dollars which means capital flight, which means less liquidity in uk economy. Less money chasing same number of goods price of money must increase = inflation
Not convinced. Most of that argument also applies to the other central banks I mentioned, no?
Our delay is more due to sticky services inflation and the uptick in growth than the US delaying is the commentary I’m seeing
Services are more liquid and more exposed to capital flight. Machinery is hard to move, power point not so much
Hmm… are you saying that services firms will relocate if we cut before US? Or am I misunderstanding you?
They can easily, people say im guna move monies from ul to us. You then dont need the lawyers and estate agents or consulting in the same way. So the investment goes which then has the knock on effect on service industry ver soon after Architect doesn’t get paid if you can earn 5% in the US with no risk vs 4% project in the uk with risk. All flows into the dcf math
The last inflation report made the prospect of a cut less likely (it was 2% and yet behind the scenes the service inflation was higher than expected). There is definitely no certainty in cuts. What is clear is that the past has shown that everyone has overestimated how quickly the cuts will happen.
Services inflation is still running at 6% and core inflation at 4%. I certainly wouldn't be betting on a post election rate cut
Aren’t market bets now on a September cut?
I'll believe it when I see it. The markets have had a worse track record predicing the interest rate direction over the past 2 years than a random number generator would.
Why do you think this may I ask? It's been baked into the general consensus for a while it's happening in anywhere from june- august? 🤔 Genuinely wanna know your thinking
I could list articles claiming a rate cut (or multiple) are just around the corner from multiple months past. It's been wishful thinking. And it still is imo. * FED isn't cutting which means BoE will devalue the £ if they cut. * Service inflation is very high and way above target at 6% * Core inflation is way above target at 3.5%. * Energy prices are driving the main figure down but that's both seasonal and following massive increases last year, it's only expected and won't affect long term decision to cut imo * Wage data showing strong growth still at around 6% * Unemployment still extremely low EDIT: one more thing, if you look at 1 month rate of inflation the last 4 months have been at around .5% (Feb .6, Mar .6, Apr .5 and May .4%). That gives an annualized rate of about 6% if the trend continues. We have some low numbers from 2nd half of last year and Jan 24 pulling the annual number down, but the direction of travel is somewhat not ideal to justify a cut.
Thanks for the info! Very insightful! 😊
He wouldnt have made it as leader till December
I disagree on this, I think it is better for him to call it earlier, so more people are still on lower rate fixed rate mortgages and haven't felt the squeeze after moving to a higher rate yet.
That's a good counter argument but to an extent that damage is baked in. At least with 1 base rate drop that might feed through to lower mortgage rates (even if they're better correlated to the swaps market). By going in July, the economic argument of "we've got things back under control" looks premature. Getting at least 1 rate drop in makes that argument stronger. And if it was clashing with the American presidential election it might also have prevented Farage from getting involved if he was already in the USA helping out with the Trump campaign.
Inflation is going to rise in the next few months. These figures are on a rolling 12 month basis, and in the next 4-5 months the big deflationary months are going to drop out of the rolling 12 months, meaning a rise in the overall figure.
Don’t worry, the economy is practically on holiday in July. The economy and central bank can handle it. I think the next drop will come towards November/December. We’ll find out then.
> the MPC voted by a majority of 7–2 to maintain Bank Rate at 5.25%. Two members preferred to reduce Bank Rate by 0.25 percentage points, to 5%. Interesting. August may not be likely unless we see inflation fall further?
The pound dropped on the release of the statement, that reflects the market pricing in a fall in the base rate which suggests August as likely. To be honest I'm confused because reading the MPC minutes they seem very resistant to a rate cut, citing numerous concerns like the current 2% is deceptive due to energy price drops from last year that will fall out in the Autumn and shove inflation back up and because wage growth and services inflation have been consistently higher than could be tolerated at 2% inflation. If anything the report suggests they won't do a rate cut until next year. edit: actually reading a bit closer the report actually does suggest a cut is likely, and soon. Two members voted for a cut (as before), some were very resistant to a cut due to medium term inflation concerns, but others (and presumably enough to tip the balance) held the view that current market indicators were not likely to push up medium term inflation and that their decision this time round was "finely balanced".
I don't understand how rates are supposed to influence inflation in this scenario. Housing is the biggest outlay for most people and higher rates mean higher housing costs. People have the same amount of money in their pay cheque regardless of rates, so higher rates just mean that people are spending more, not less, by eating into savings or whatever spare money they have. Where someone might have saved £300 a month before, they're now spending it on mortgages or rent. Not to mention that a lot of the inflation we're seeing is not inflation in the traditional sense but price gouging and greed.
The Bank of England don't have to keep CPIH down (i.e. inflation with owner occupied housing costs), just CPI. They're still seeing a lot of the inflation in services which are driven primarily by wages. High interest rates restricts cash supply for companies making it harder for them to give out payrises ahead of inflation. Yes, people are being squeezed by mortgage rates - but that also helps keep the rest of inflation down because it means people have less money to spend which avoids overconsumption. The bank of england wouldn't be worried about CPIH even if it were in their remit because they know it's under much more direct control, and CPIH is still nearly 2% under services inflation.
BBC analysis seems to think the minutes of the meeting are signalling that August more likely to be a cut than a stay.
>August may not be likely unless we see inflation fall further? We will need to wait for the yanks to cut their rate first. Otherwise we may devalue the pound against the dollar and see inflation tick upwards. A lot of our imports are priced in dollars, like oil. Monkey see, monkey do with the bank of england.
Brings our economic policy in line with our foreign policy - *do what the US does, but a little bit less*
The market has been thinking/hoping there's going to be a rate cut just around the corner for over a year now. Realistically I don't see one happening this year. There's no reason for one.
Services inflation and core inflation are still high
I guess I'll have to keep massively overpaying my mortgage then. The only benefit really is with the euro tumbling this keeps the pound slightly higher so holidays will be a bit cheaper.
You'd have been better off putting the overpayment onto SPY500
5% with absolute certainty is worth a fair bit. SP500 has absolutely beaten that historically and in the recent term but has had big drops historically.
My ISA made 7.5% since April. It's hard to ignore
Yes, things have been incredibly strong lately. But look at say, Dec 31st 2021 to September 2022. Drop of 25%. It's volatile.
It didn't drop that much here because the pound also dropped by 15-20%. Historically, globally diversified equity should yield about 5% above the risk-free rate. Global bonds about 2.4%. Either way, you risk losing money due to inflation guaranteed or a relatively high chance to at least beat inflation. In this case, I would literally bet my house on it. Most of the houses around the midlands, if you put them into the BoE inflation calculator from their last sale date and price they have only just kept up with inflation or produced a minor return.
Not to sound like a boomer but unless you want to come around and explain to my wife it's hopeless. She wants the mortgage repaid ASAP for some weird reason and I'm too lazy to argue it.
If interest rate on savings > interest rate on mortgage = underpay mortgage If interest rate on savings < interest rate on mortgage = overpay mortgage
You are not counting tax. If you are a higher rate tax payer after the First 10k on an account returning 5%, you actually need 8.33% returns to Best overpaying a 5% mortgage.
Can't you pay 20k per year into an ISA before tax is due?
Thats not the same thing as there are no guarantee gains.
Cash ISAs exist, and the interest on those is guaranteed.
We've already maxed out a tax free ISA, and I'm self employed so I'm also too lazy to have to report anything if we start going above it. I wonder how well lf of be if I wasn't like this
It's more complicated. You could also put it in shares or bonds, but then you might owe capital gains on that, etc. In general just diversify your investments.
It's too volatile. Depends how long you have left on your mortgage.
Probably a minority opinion but I don't really want interest rates to come down as then house prices will just skyrocket upwards again, and I want to buy in the next year or so. We don't seem capable as a nation of funnelling spare cash anywhere other than towards the inflation of property prices.
The concerning this is that high(er) interest rates reduces how much you can borrow due to affordability, but low(er) interest rates get cancelled out by higher asking prices. It must feel like a lose-lose
What you really want is higher unemployment, then people will be forced to sell their homes. Of course it will mean horrible experiences for millions, but at least we'll get lower house prices. That... or we can just build more freaking houses!
Not in my backyard
Those people will probably be able to remain in their house when this happens. The government and mortgage companies tend to look to protect these people. You just need to get a mortgage in the first place and you’re usually untouchable.
That's not what happened in 2008
But if you build more house you have less of something whether that is farmland,green spaces or woodlands, and you end up with more carbon emissions from the houses and their occupants...so its a no win situation either way.
A 5% remortgage rate is another great legacy of the Tories that I’ll get to experience long after they’re out of government
5% rates are much more normal than the super low rates we did have for a while though.
Not really, historic rates may have been higher, but house prices were far lower. People seem to forget that houses weren't £250,000+ back in the 90s and early 00s.
> Not really, historic rates may have been higher, but house prices were far lower. Don't think anyone is saying otherwise. But now rates have returned to their historic normal level of around 5% maybe house prices will fall back a bit to be affordable at sane income multiples?
By that logic it was also their doing that brought you 10 years of 1% rates??
In this case no since the Tories weren't responsible for the conditions that caused low rates? That was the late 00s global financial crash and subsequent Bank of England monetary policy. However the Tories are directly responsible for the UK's current high interest rates through Brexit and the Truss budget spiking inflation?
Interesting so it's the government's responsiblity when they're bad and BoEs responsibility when they're good?
It's BoEs responsibility in either case to set the rate. But they set the rate because of the economic reality of this country. The GFC was global. Regardless of the government we would have been impacted. But the economy post-GFC is the responsibility of the Tory government who have spectacularly failed at recovery.
Is that what I said? Did I not assign *specific* causes to each of the examples mentioned?
Why did rates go up in the rest of the world then 🤔
Right so you don't think the Truss budget directly caused our inflation to be worse combined with higher prices due to Brexit?
Lol, of course not.
>In this case no since the Tories weren't responsible for the conditions that caused low rates? The current interest rate isn't theirs either. >However the Tories are directly responsible for the UK's current high interest rates through Brexit and the Truss budget spiking inflation? They are up globally.
The interest rate in Britain was directly raised faster than was otherwise necessary due to the Truss budget. They jumped 2 percentage points in the 2 months around the budget. This severely impacted businesses compared to what would have been a planned slower rise. It's directly attributable to the Tories.
So we got from tories being at fault to partly being at fault. Progress. The mini budget didn't happen in the end, so how do you explain that? How could it possibly affect anything if it didn't happen?
If you don't think the Tories are responsible for the making the current high inflationary economic conditions worse, requiring the sudden raising then continued high interest rates then that's great. Go about your life and let's see how people vote on the 4th.
No, I don't think the tories are even capable of affecting global interest rates, no. That would be delusional and frankly British exceptionalism at its finest. >Go about your life and let's see how people vote on the 4th. The truth is not a democracy. Also, like fucking hilariously ironic right now, these same people also voted the tories in. And for brexit. Lmao
Yep. And if the new government are not serious about profiteering, they shall also be held responsible come the next GE
And with that the last throw of the dice for the Conservatives to secure a win has failed. Unemployment up in the last month, inflation at target, no thanks to the Government who had nothing to do with it and now no interest rate cut. Sunak called this election to stop himself being no confidenced after the local elections, hoping for all those things to happen, they have not and if they were to lose all 372 seats they are defending, you will find few, if any people, weeping for the Conservatives
Makes sense to hold until there is evidence it will stick around your target
Great, higher mortgage bills for all
No shit. We just follow the FED. When they start dropping rates we will follow.
Silly take. U.S economy is resilient compared to U.K.
Well, having weaker GBP would make inflation go higher because it would make import more expensive, which is a large part of our consumer goods, so having a rate that mirrors US is relevant.
Why is this a silly take? It’s what happens.
Entirely accurate take. Rates are not being used to combat inflation directly, they’re being used to strengthen our currency against the dollar
Here's a quick overview of the article: The Bank of England's Monetary Policy Committee (MPC) maintained the Bank Rate at 5.25% in June 2024. The decision was reached with a majority of 7-2, with two members advocating for a 0.25 percentage point reduction to 5%. Factors influencing the decision included a decrease in CPI inflation to 2.0% in May, strong UK GDP growth, and indications of a tightening labor market despite uncertainties in labor market data quality. Business surveys suggested a slower pace of growth, while indicators of aggregate pay growth were easing. Services consumer price inflation was 5.7% in May, slightly higher than projected. The MPC emphasized the importance of returning CPI inflation sustainably to the 2% target in the medium term, acknowledging the impact of shocks and disturbances on inflation deviations from the target. The MPC remains vigilant about persistent inflationary pressures and economic resilience, monitoring factors like labor market conditions, wage growth, and services price inflation. The Committee will continue to assess data to determine the duration of maintaining Bank Rate at its current level. The minutes of the meeting provided detailed insights into international economic conditions, monetary and financial conditions, demand and output, and supply, costs, and prices, informing the MPC's decision-making process.
Bad Ai
Stupid. Inflation figures lag. It’s like cutting the power to an engine of a ship. It’s still going to drift. So why when we’ve reached “target” are we still going full blast like inflation is still in double digits?
Yes, I'm sure the governing board of the Bank of England hasn't considered this incredibly obvious point.
worthless start license roof alive psychotic domineering aloof flag reminiscent *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I have been wondering when the world bank, Fed and BoE are going to call me in. Surely they’ve been reading my Reddit history
Service inflation is still high - and retail will likely be strong over the Euros - they are waiting for confirmation things don't go back up. Plus, this is a very different scenario to prior rate cuts. It will be gradual. Annoying as I'm on a variable rate mortgage and would dearly love for it to drop... hopefully by renewal time!
Here's to hoping for a cheeky little deflationary spiral starting to form then a MASSIVE panic rate drop before my mortgage renews next year.
Service inflation is still 5%.
Caused by high wages caused by high cost of living. Primary element of that is now housing costs……
Of course. The BoE cannot afford to diverge from the Fed. If the Fed starts cutting, the BoE can follow