Bank hikes rates by 0.25 per cent but next MPC decision won’t be so easy
Inflation is still far too high and core inflation is proving worryingly hard to shift
Central bankers are careful with words because they are closely watched and acted upon by the markets, the views of which they help to inform. So you won’t see words such as “earthquake” or “crisis” or “horror show” in the Monetary Policy Committee’s minutes even if that’s what it has felt like we’ve been living through in recent weeks.
In just the last seven days, authorities have put together a rescue for Credit Suisse, one of the world’s largest and systematically significant banks, averting a full-blown crisis but creating a nasty rumble in the bond markets because of the way it was put together; the US Federal Reserve raised its rates by a quarter-point; and Britain’s inflation unexpectedly shot back up to 10.4 per cent when forecasters had been predicting a single-digit figure.
“There had been large and volatile moves in financial markets since the MPC’s previous meeting,” was how the Bank of England’s rate-setting committee described it.
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