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    KPMG comments on today’s Bank of England Monetary Policy Committee decision

    Bank of England strikes a balanced tone with today’s cut to the bank rate


    “Bank of England strikes a balanced tone with today’s cut to the bank rate” says Yael Selfin, Chief Economist at KPMG UK.

    “After a pause in September, the Monetary Policy Committee (MPC) felt compelled to cut the bank rate by another 25 basis points. A cut had been widely expected, as both pay growth and inflation continued to ease in recent data, with both measures significantly below the Bank’s projections at the time of the first cut in rates back in August.

    “However, the large fiscal loosening announced in the UK Budget and some of the proposed policies from the incoming US administration could impact inflation levels next year. The MPC may now feel the need for another pause in December and to limit the pace of cuts in 2025 as a way to lean against these potential inflationary pressures.

    “The remarks accompanying the decision struck a balanced tone, stressing the need to maintain price stability and respond to economic shocks. However, with the balance of inflation risks now skewed back to the upside, we see the base rate settling at around 4% by the end of 2025.”


    Yael Selfin

    Vice Chair and Chief Economist

    KPMG in the UK

    -ENDS-

     

    For further information please contact:

    KPMG Media Relations

    Gerard Swinley

    gerard.swinley@kpmg.co.uk

    M: +44 7510 375540

    T: +44 20 3078 3948

     

    Notes to Editors:

    About KPMG

    KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023. 

    KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 273,000 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.