Bank of England Wobbles on the Tightrope Between Inflation and Recession
The U.K. central bank seems to have lost some of its willingness to tackle inflation by raising interest rates.
The Bank of England is looking at a growing inflation problem.
Photographer: Hollie Adams/BloombergThe Bank of England’s latest meeting has delivered a dovish rate hike that’s fraught with complications. Its Monetary Policy Committee is clearly struggling to navigate a path between the devil of runaway inflation and the deep blue sea of tipping the economy into recession.
Six members voted for the expected quarter-point increase in the official bank rate to 1%, the fourth-consecutive rise, but three wanted a more aggressive half-point hike. Confusingly, two policy makers (who presumably voted with the majority) wanted to drop the bank’s guidance about the prospect of further action in the coming months — producing the awkward consensus statement that "some degree of further tightening...might still be appropriate.” The outlook is as clear as mud.