The central bank of the U.K. warned at the latest meeting of its policy board that the rate of price growth in the U.K. is likely to exceed the previously forecast peak value, according to The Daily Telegraph. On Wednesday, the Bank of England published the minutes from the March meeting of the Monetary Policy Committee that showed members were increasingly concerned over “a significant risk that inflation would exceed 5% in the near term.” The report showed that members were split over tightening monetary policy, with three members of the nine-person MPC voting for a rate hike.
The details of the minutes suggest that members voting for no change in policy were becoming increasingly moved by the high inflationary pressure to move on interest rates. However, Alan Clarke of BNP Paribas said, “The uncertainty that has been holding them back has got even worse,” referring to oil market turmoil and what the minutes called “recent indicators of household spending and confidence.” The committee pointed to the spike in energy costs as the reason for the revision in the short-term inflation outlook.
Click here to read the story on the MPC minutes from The Daily Telelgraph.
Click here for analysts’ reactions to the minutes from The Daily Telegraph.