PwC comments on September 2025 MPC meeting

Commenting on the Bank of England MPC meeting today and the vote to hold interest rates steady at 4%, Barret Kupelian, Chief Economist at PwC, said: 

“With a 7-2 voting split, the Monetary Policy Committee decided to keep its policy rate on hold. The meeting’s summary highlights the tightrope balance the Bank needs to strike between persistent inflation and maintaining demand growth in the economy.

“The economic data shows that some slack is appearing in the labour market, with the ratio of vacancies to unemployed below equilibrium levels. A cooling labour market should therefore translate to cooling demand across the economy and support disinflation. 

“On the other hand, members are worried about persistently above target inflation seeping into higher pay demands. The rationale for this is that the current uptick in inflation is driven by the more ‘visible’ sectors including food - with food inflation running at around 5% - and regulated prices which include utilities and other recurring outgoings, all of which are difficult to avoid.”