- Base rate unchanged at 4.5% for third consecutive meeting
- Annual inflation holds at 6.7% – double official target
- 6-3 MPC vote reveals deepening policy divide
- Manchester manufacturers report 12% workforce reduction
- 2024 GDP forecasts slashed to 0.8% growth
The Bank of England’s Monetary Policy Committee held firm today, leaving borrowing costs at their highest level since 2008. With consumer prices rising at nearly three times the central bank’s 2% target, policymakers face mounting criticism over their inflation-fighting strategy. Economists warn the stalemate risks prolonging financial pain for 1.4 million UK households facing mortgage renewals this quarter.
Governor Andrew Bailey acknowledged the difficult balancing actbetween curbing price growth and preventing economic stagnation. Recent ONS data reveals services sector inflation remains stubborn at 6.9%, driven by surging insurance premiums and hospitality costs. The decision follows the Federal Reserve’s pause last week, creating a rare transatlantic consensus on monetary policy.
Dissenting MPC members David Ramsden and Swati Dhingra pushed for immediate cuts, arguing restrictive rates threaten to exacerbate unemployment. This comes as Manchester’s manufacturing hub reports its steepest job losses since Brexit, with export-focused firms particularly vulnerable to the strong pound. Industry analysis suggests every 0.25% rate hike reduces SME investment by £300 million quarterly.
Retail analysts highlight contrasting sector impacts – while furniture sales plummet 18% year-on-year, discount supermarkets see record revenues. Property experts warn the rate freeze could prolong the housing market slump, with average asking prices down 4.2% in Q2. Meanwhile, treasury officials quietly prepare contingency plans for potential autumn rate cuts if inflation dips below 5%.