The Bank of England (BOE) decided to keep the rate of interest without changes, in 4.25%as was discounted by the market. The agency said that the “Bilateral risks for inflation”, in the midst of a world convulsed by commercial conflicts and the war escalation in the Middle East.
“Given the perspectives and continuous disinflation, It is still appropriate to adopt a gradual and careful approach for a greater withdrawal of the restriction of monetary policy. Monetary policy is not on a pre -established path, “the committee explained.
This Thursday, June 19, the Monetary Policy Committee voted for a majority of 6 to 3 in favor of keeping the banking type 4.25%.
In fact, the committee ratified that it will continue to closely monitor the risks of persistence of inflation and what evidence can reveal about the balance between supply and demand added in the economy.
Central banks and the even risk of inflation increase
“Monetary policy will have to remain restrictive for long enough until The risks that inflation sustainably returns to the goal of 2% in the medium term They have dissipated even more. The Committee will decide the proper degree of restriction of monetary policy at each meeting, “they said.
In this sense, it was subruded that The risks around the medium -term IPC inflation path remain bilateral.
“The evaluation of the rhythm of the deflation would continue to be fundamental for these member countries to reach an opinion on the speed with which the remaining policy restrictions must be eliminated,” said and expanded: “This evaluation is likely to include a series of elements. signs of demand of demandfor example, as a result of a continuous increase in savings, they could lead to a faster opening of idle capacity in the labor market. “
On the contrary, consider that The limitations of the offer sideas the continuous weakness of the productivity or structural change of goods and work markets, could contribute to inflationary pressures. “The persistence of inflation could also be generated by the increase in food prices, which would increase inflation expectations, which would have an impact on salary and prices fixing behaviors,” they expanded.
In addition, from the Central Bank he pointed out that World uncertainty remains high When maintaining that “energy prices rose due to the escalation of the conflict in the Middle East. The Committee will continue to be sensitive to the greatest unpredictability of the economic and geopolitical environment, and will continue to update its risk assessment for the economy. “
On the other hand, the committee acknowledged that The impact of commercial policies has been evident in activity data. “On the basis of the last constellation of tariff advertisements, the provisional analysis of the Bank’s technical staff suggested that the direct impact of the commercial shock on the world GDP could be less than what the committee had expected in the May report. However, The uncertainty of commercial policy would continue to have repercussions on the economy of the United Kingdom“
Source: Ambito
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