Commenting on the Bank of England MPC meeting today, Barret Kupelian, Chief Economist at PwC, said:
“The Monetary Policy Committee announced it did not change its policy rate reflecting the ‘gradual and careful’ approach to adjusting its monetary policy. This was consistent with consensus views. Consumer price inflation still remains above target.
“Central banks feel instinctively more comfortable with the demand side of the economy. Nonetheless, it is the supply side that is proving to be more challenging to tackle. An added layer of complication is the fog of uncertainty caused by the geopolitical environment.
“The clearest illustration is oil, which has climbed from roughly $64 bbl at the end of May to around $74 bbl today. If that rally embeds itself into wage setting or in household bills, the upside risk to inflation could well push any rate cut further down the calendar. In these murky waters, patience is the Bank’s best compass, steering a steady course between hawkish overreach and premature relief.”
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