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Phoebus comment on the BoE's bare rate decision
20 June 2024
“With central banks in Canada and Europe already starting to cut interest rates, it’s frustrating for lenders that the UK’s conservative monetary policy remains notoriously slow to effect change.
“I expect, though, that high service inflation influenced today’s decision. It rose by 5.9% in the 12 months to May 2024, which I should think is still uncomfortably high for the UK’s Monetary Policy Committee (MPC). With the General Election out of the way in July, we can only hope that service inflation drops ahead of the next MPC meeting in August. If not, and they decide to stick at 5.25%, the MPC will have held the base rate at 5.25% for an entire year.”
