Essentials of Monetary Policy

The Bank of England Surprises with a Rate Pause

September 21, 2023

Hendrix Vachon
Principal Economist

The Bank of England (BoE) held its Bank Rate at 5.25% today.
That said, the BoE’s decision was a close call. A single vote is all that separated a pause from another rate increase.
Even though inflation has come down lately, strong wage growth isn’t consistent with a sustainable return to target. The BoE will likely want more data in the coming months showing that the economy and employment have slowed convincingly.

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