The Bank of England Monetary Policy Committee published their Monetary Policy Report today, 30 January 2020. A link to this is available from here and the pdf version is available from here:
Headlines:
- Growth has slowed in the UK
- Inflation is below our 2% target
- There are early signs that growth is picking up
- If that doesn't happen, interest rates could fall
In 2019, the UK economy slowed because firms’ uncertainties about Brexit reduced their spending, and growth in the world economy slowed. UK inflation fell back below the MPCs 2% target.
The latest data suggest that the uncertainty facing businesses has fallen, and that global growth has stabilised. The Bank's MPC expect uncertainty to fall further and global growth to pick up. If that happens, it should help to support growth here in the UK.
If that does not happen, then the Bank may need to lower interest rates to support UK growth and ensure that inflation returns to the 2% target sustainably.
If the economy develops as expected, then upward pressure on prices should build gradually over the next few years. In that case, a modest increase in interest rates may be needed to keep inflation at the 2% target.
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Bank of England, Agency for Scotland
The Bank of England is the central bank of the United Kingdom. Sometimes known as the “Old Lady” of Threadneedle Street, the Bank was founded in 1694, nationalised on 1 March 1946, and in 1997 gained operational independence to set monetary policy.
Dundee & Angus Chamber of Commerce
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