Has the Bank of England done enough to stave off recession?
Spectator (UK)Nov 02, 2023
Bank of England Keeps Rates at 15-year High
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The Facts
The Bank of England (BoE) has decided to hold interest rates at 5.25% — its highest level in 15 years — as it warned that the UK economy was unlikely to see growth until 2025.
The BoE's Monetary Policy Committee 6-3 decision is its second pause in a row after 14 consecutive rate hikes. In September, the bank voted 5-4 for its first rate halt since December 2021.
The Spin
Pro-establishment narrative
Decisions by the BoE will likely continue to be hard-fought within its committee as the central bank walks a tightrope between tackling inflation and avoiding a recession. So far, the UK has avoided the doomsday predictions for its economy, but challenges inevitably remain as estimates for targeted inflation levels remain deep into 2025.
Establishment-critical narrative
With growth slowing and unemployment rising, the decision to keep interest rates at their current level is a further signal of the UK government's stagnant and ineffective policymaking. The BoE lacks transparency over inflation modeling and its long-term plan, as job outlooks and quality of life continue to suffer.
Nerd narrative
There's a 50% chance that the UK's annual inflation rate for 2023 will be at least 6.99%, according to the Metaculus prediction community.