Interest Rates: Why Is the Bank of England Holding Firm?

Interest rates are rising in several major economies. So why has the Bank of England decided to hold Bank Rate at 3.75%?

That’s the question Richard Harris tackles in the latest Citrus Bites, as he looks at the increasingly complicated picture facing the UK economy.

Higher energy prices are creating renewed concerns about inflation, but so far much of that pressure hasn’t fed through into underlying prices. At the same time, UK growth remains relatively modest and the jobs market is showing signs of cooling.

Key points from the episode include:

  • why the Bank of England is taking a different approach to some other central banks
  • what the latest inflation figures tell us
  • how higher fuel, energy and food production costs could affect inflation
  • why the strength of the UK economy matters for interest rates
  • what’s happening to wages and job vacancies
  • what the Bank of England could do next
  • what the current picture could mean for mortgage borrowers

Watch the full episode now

For now, the Bank of England has chosen to wait. But with three members of its Monetary Policy Committee voting to increase rates, there is still plenty to watch.

Watch the latest Citrus Bites above for Richard’s full update.

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