© Joseph Horton for The New York Times
Two MPC members vote for a quarter-point rise but Bank argues rapid reaction risks creating volatility
The Bank of England has left interest rates on hold, arguing that reacting too quickly to inflation threats risked creating “undesirable volatility”, as the Iran war weighs on the UK economy.
Seven of the nine-person monetary policy committee voted to keep rates at 3.75% as the MPC weighed the threat of higher inflation against the prospect of an economic slowdown.
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© Photograph: Tolga Akmen/EPA
© Photograph: Tolga Akmen/EPA
© Photograph: Tolga Akmen/EPA
Reform UK leader used private meeting at Bank of England to urge governor to drop plans for state-run cryptocurrency
Nigel Farage has been trying to block a Bank of England cryptocurrency plan that could be costly for the billionaire bankrolling his party.
The Reform UK leader has said Christopher Harborne wants nothing in exchange for the millions he has donated to the party and the undeclared £5m personal gift to Farage that the Guardian revealed in April.
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© Photograph: Tolga Akmen/EPA
© Photograph: Tolga Akmen/EPA
© Photograph: Tolga Akmen/EPA
War’s impact on UK cost of living more muted than first forecast suggesting fuel price rises have failed to spill out more widely across UK plc
As soon as Iran choked off oil supplies through the strait of Hormuz at the start of March, there were dire warnings about rocketing UK inflation and the drastic action the Bank of England might take to rein it in.
At one point, investors were expecting as many as three quarter-point rises in interest rates before the end of the year – a sharp turnaround from earlier forecasts of rate cuts.
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© Photograph: Ceri Breeze/Alamy
© Photograph: Ceri Breeze/Alamy
© Photograph: Ceri Breeze/Alamy
Surprise ONS figure confounds forecasts of an increase to 3% as Bank of England prepares to set interest rates
UK inflation unexpectedly remained at 2.8% last month as higher transport and fuel costs were offset by slower food price rises.
May’s annual price rise reading recorded by the Office for National Statistics (ONS) came despite economists’ forecasts of a rise to 3% as the Middle East restricted global energy flows.
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© Photograph: Kevin Wheal/Alamy
© Photograph: Kevin Wheal/Alamy
© Photograph: Kevin Wheal/Alamy
Federal Reserve to make first decision under Kevin Warsh as Middle East hopes ease inflation pressures
Central banks in the US and UK are expected to leave interest rates on hold this week as the peace deal in the Middle East is expected to ease inflationary pressures.
The US Federal Reserve is expected to hold its benchmark interest rate at a range of 3.5% to 3.75% on Thursday, in what will be the first policy decision under new Fed chair – and Donald Trump’s pick – Kevin Warsh.
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© Photograph: Ryan Murphy/Getty Images
© Photograph: Ryan Murphy/Getty Images
© Photograph: Ryan Murphy/Getty Images
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