This Thursday the Bank of England will announce the decision on the monetary policy that they will implement. The questions remain in themselves will continue with similar steps to the FED and what forecast they have for the changes.
In previous announcements, the Bank of England (BoE) had announced that changes in monetary policy would take place when inflation is sustained around 2%. Therefore, the BoE is expected to maintain firm its monetary policy regarding the stimulus policy implemented after the arrival of the pandemic crisis.
This implies that changes in interest rates will be implemented once the inflationary indicator grows and is controlling, as well as the maintenance of economic activity.
Even so, after the announcements of the FED last week and the evolution of economic indicators, it could be expected that the governor of the BoE, Bailey, will present change guidelines for the future.
The CPI (monthly) for the last month was 0.6% and an annualized increase of 2.1% according to the Office for National Statistics. As restrictions due to the pandemic have been lifted and vaccination policy has advanced, economic activity has been reactivated. This was seen in the PMI results for manufacturing and services that were published in the last hours and that, together with the previous months, represents a great growth.
The PMI for services published today remained at 61.7 slightly lower than the previous month, while manufacturing grew slightly to 64.2. Both indicators are due to the change in the circulatory measurements in recent weeks.
The debate continues to revolve around when and how to implement the changes. The current interest rate – and forecast – remains at 0.10%.