The Bank of England’s Monetary Policy Committee (MPC) has voted unanimously to increase the Bank Rate to 0.75%. The committee also voted unanimously to maintain the stock of corporate bond purchases and UK government bond purchases.
Since the May Inflation Report, the near-term outlook has evolved broadly in line with the MPC’s expectations. Recent data appear to confirm that the dip in output in the first quarter was temporary, with momentum recovering in the second quarter. The labour market has continued to tighten and unit labour cost growth has firmed.
The MPC continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal.
The Committee also judges that, were the economy to continue to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to the 2% target at a conventional horizon. Any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent.
The next MPC meeting is Wednesday 12 September 2018 with the announcement to be published the following day on 13 September 2018.