I know it was inline with expectations, but A 50bps move seems far too aggressive to me. I understand the risk of long-term inflation expectation moving higher and the need to contain them, but given recession is now the base-case it seems absolutely absurd to me to be overly worried about long-term inflation expectations.
There is nothing the BoE can do to directly address the supply-side inflationary pressures we're facing. What they should be focused on right now is where inflation expectations are likely going to be given their economic forecasts, and while those forecasts do suggest double-digit inflation numbers, they also suggest recession. While some monetary tightening was clearly needed, this has been a period of historically aggressive monetary tightening, to tackle inflation pressures that they have next to no control over, into a recessionary environment, during a time when people are struggling to pay their energy bills - let alone their mortgage and other repayments linked to interest rates.
If their transitory inflation call wasn't bad enough, they're now about to follow that with an even larger policy mistake which will push thousands of people into poverty, with many likely to lose their homes and jobs as a direct result of this move. Well, that's my opinion anyway. I think this 0.5% move after 5 consecutive 0.25% hikes given the economic risks is insane.
There is nothing the BoE can do to directly address the supply-side inflationary pressures we're facing. What they should be focused on right now is where inflation expectations are likely going to be given their economic forecasts, and while those forecasts do suggest double-digit inflation numbers, they also suggest recession. While some monetary tightening was clearly needed, this has been a period of historically aggressive monetary tightening, to tackle inflation pressures that they have next to no control over, into a recessionary environment, during a time when people are struggling to pay their energy bills - let alone their mortgage and other repayments linked to interest rates.
If their transitory inflation call wasn't bad enough, they're now about to follow that with an even larger policy mistake which will push thousands of people into poverty, with many likely to lose their homes and jobs as a direct result of this move. Well, that's my opinion anyway. I think this 0.5% move after 5 consecutive 0.25% hikes given the economic risks is insane.