KPMG comments on today’s interest rate decision

“No easy choices for the Bank of England as economic outlook deteriorates” says Yael Selfin, Chief Economist at KPMG UK.

“No easy choices for the Bank of England as economic outlook deteriorates”

“A potential new spike in inflation when the Energy Price Guarantee ends in April, which has not been fully factored into the Bank’s outlook currently, could put pressure on the MPC to raise rates above the neutral level more quickly in order to rein in inflation expectations.   

“At the same time, the outlook is riddled by the evolution of energy prices, while the risk of a significant fall in house prices looms in the background. An expected consumer-led recession could see the UK economy shrink by over 2% by the end of next year, easing much of the ongoing inflationary pressures.

“The Bank’s decision to begin selling short-dated bonds this week underlines its determination to unwind the QE programme in a timely fashion.”


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Notes to Editors:

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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