12:30
Traffic jam:   4
$
92.5919
100.2704

Andrew Bailey suggests that next month's key rate hike will be higher than expected

15 October 2022
2277
2 min.
6
Andrew Bailey suggests that next month's key rate hike will be higher than expected

Key rate

The Bank of England intends to resort to a more radical than planned key rate hike in response to the current difficult situation in the UK economy. The regulator's governor Andrew John Bailey said this, according to Sky News television on Saturday, at a forum hosted by the International Monetary Fund in Washington.

"Given the current state of affairs, my most likely assumption is that inflationary pressures will require a stronger response than we may have thought in August," Andrew Bailey said.

The bank had earlier predicted that domestic inflation, boosted by rising energy prices, could reach 11% in October. The regulator's stated aim is to keep prices from rising by more than 2%.

The Bank of England is due to hold its next meeting on 3 November. Many experts expect the rate to rise from the current 2.25% to 3% or even 3.25%. It cannot be ruled out that it could go as high as 6% by the middle of next year.

Also, Andrew Bailey said that in making its decision, the regulator will analyze the effectiveness of the government's programme to freeze electricity prices, as well as the new budget strategy to be presented by the new Finance Minister Jeremy Hunt on October 31. He succeeds Kwasi Kwarteng. GLOBALENG.BIZ wrote about this earlier.

Kwasi Kwarteng lost his portfolio on Friday amid a government crisis that began in late September, when he and the prime minister unveiled a new economic programme for the cabinet. It envisaged a massive tax cut that would have left the budget short of £45bn a year, equivalent to 1.8 per cent of GDP. The government will spend a further £150bn to freeze electricity and gas prices for consumers for two years.

It is worth noting that the kingdom's equity and bond markets reacted badly to the moves, with the pound plunging to a record low, at one point almost equalling the dollar.

The Bank of England was forced to step in and has so far spent more than £65bn buying bonds to support the market. Experts doubt that the plan of Prime Minister Liz Truss to reduce taxes and government regulation will quickly lead the country out of recession, achieve economic growth and curb the record high inflation. At the same time, the country's debt burden will increase and businesses and people are already facing rising interest rates on loans and mortgages.

Persons4 and Companies2 in the news

Chancellor of the Exchequer
1 place
Governor of the Bank of England since 16 March 2020.
2 place
Secretary of State for International Trade, President of the Board of Trade, Minister for Women and Equalities.
3 place
Secretary of State for Business, Energy and Industrial Strategy
4 place
Sky News
1 place
Bank of England
2 place
Section:
Source foto:
flickr.com

ENGLAND NEWS


News GlobalEng.biz -this is the latest and most up-to-date information about the resonant events that have occurred in the region. The task of the resource's news feed is to convey to readers information about important events in business, politics, economics, healthcare, culture and other spheres of life in England with maximum accuracy and objectivity.
News GlobalEng.biz - this is coverage of the economic processes taking place in England, the latest news of public life, incidents and an overview of political events. English news is information about the activities of small and medium-sized businesses, the work of housing and communal services, the implementation of significant projects. The site's journalists describe not only the life of the region, but also talk about the current state of the English economy. Everything you need to know about innovations in the field of industry and agriculture, economy and government is collected in the "News" section on GlobalEng.biz.
News of England promptly informs the reader, shows the real picture and opens up topical topics. Communication with government structures and business gives us the opportunity to provide our readers with reliable, information-rich material.
The main page of the portal contains the key news of England!
Alena Potapova

Development Director
Population
8112615028
Died this year
14241390
Born this year
35036340