The Bank of England’s decision to leave interest rates unchanged signalled the hiking cycle may be coming to an end, but experts believe the dovish move signals a ‘higher for longer’ rates policy.
For the first time in almost two years, the BoE opted to leave borrowing costs at 5.25% today (21 September), while warning that rates will remain high to tackle inflation. The committee's decision was a close call, with five voting to pause, while four voted in favour of a 25bps hike. "Enough voters were either satisfied that inflation will not prove to be overly sticky or were concerned enough about downside risks to believe that a pause was warranted despite still high levels of inflation," said Oliver Blackbourn, portfolio manager at Janus Henderson. Investors had widely predicte...
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!['I do not think the Bank will be able [to lower rates] because I do not think inflation will come down much further or much faster. I think we are stuck with a fairly sticky inflation situation,' she said.](jpg/bank-of-england-2-323x202.jpg)
