BoE MPC kept interest rates on hold on Monday in what was probably a unanimous vote again. (The MPC meeting concluded on Friday but the decision was made public on Monday.) Although the recent rise in the oil price is likely to have meant that the MPC has nudged up its inflation forecast for Wednesday’s Inflation Report, CPI inflation looks set to remain well below the 2% target until well into next year. “The subdued outlook, alongside the tough fiscal squeeze that is now all but certain to hit the economy next year as a result of the general election’s outcome, should ensure that monetary policy is tightened only gradually from next year.” says Capital Economics
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