UK interest rates: Will the Bank of England increase the base rate?
The Bank of England’s Monetary Policy Committee’s latest bank rate decision will be announced tomorrow (30 April) at 12pm – will ratesetters reduce, hold or raise rates?
Who are the nine members of the Monetary Policy Committee?
The Monetary Policy Committee is made up of nine members - the governor, three deputy governors for monetary policy, financial stability and markets and banking, a chief economist and four external members appointed by the chancellor, currently Rachel Reeves.
External members are appointed by the chancellor to ensure outside voices are heard within the MPC.
A representative from HM Treasury also sits with the MPC at its meetings and can discuss policy issues, but is not allowed to vote.
These are the current nine members of the MPC:
Andrew Bailey - governor
Sarah Breeden - deputy governor, financial stability
Huw Pill - chief economist and executive director, monetary analysis
Sir Dave Ramsden - deputy governor, markets and banking
Dr Swati Dhingra - external member
Megan Greene - external member
Professor Alan Taylor - external member
Catherine L Mann - external member
Why the MPC might hold UK interest rates
Given the degree of uncertainty over the eventual fallout from the conflict in Iran, and the UK’s precarious economy, some experts think that the MPC will once again err on the side of caution and hold UK interest rates unchanged.
“We expect the MPC to lean heavily into the uncertainty angle on Thursday,” said Matthew Ryan, head of market strategy at financial services firm Ebury. “In our view, it remains too soon for the bank to both assess the effect of the energy price spike on second round inflation, and have a clear timeline for when oil traffic will resume through the Strait of Hormuz.”
Holding UK interest rates unchanged would have the added benefit of signalling to markets that the MPC is willing to move UK interest rates in either direction, depending on how events unfold.
“[Bank of England governor Andrew] Bailey could again gently push back against market pricing for hikes, but we do not expect the statement to rule anything out,” Ryan added.
When does the MPC meet to decide UK interest rates?
The Monetary Policy Committee meets today, Wednesday 29 April, but the decision made by the committee’s nine members won’t be released until tomorrow at midday.
The announcement comes alongside a report detailing how each member voted and why they decided to lower, raise or hold rates.
Keep with us as we’ll announce the committee’s decision as soon as it’s confirmed at 12pm.
In a rare decision, the committee voted unanimously to hold interest rates, citing the increase in global energy and commodity prices caused by the conflict in the Middle East.
It said it would continue to monitor the situation in the Middle East “closely” and its impact on wholesale energy costs.
Good afternoon and welcome to our live coverage ahead of the Bank of England’s Monetary Policy Committee announcing its latest base rate decision tomorrow (30 April).
Stay with us as we bring you all the latest news, analysis and reaction.
