The Monetary Policy Committee of the Bank of England has voted to keep interest rates at 5% in a widely expected decision. Sticky inflation and a rise in the core rate yesterday didn’t buoy hopes for another cut…
Breakdown: 8-1 to leave rates on hold. Last month it was 5-4 to cut.
The Bank dropped interest rates for the first time last month after 14 consecutive hikes, while the Fed cut its rate by a whopping half a point this week. No continuation of that doveish mood this time round. The markets only had it at 10% that a surprise cut was on the way…
Andy Haldane, Burnham’s recent adviser on the economy who has not taken up a No10 job, told Andrew Marr on LBC:
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos…
imposing windfall taxes on oil & gas or on banks or upping capital gains tax would […] repeat the mistake that Rachel made […] The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and/or inability to cut public spending.”