The Bank’s decision to keep interest rates at 0.25% last week may seem like business as usual. But there’s nothing normal about the way that monetary policy is operating at the moment. The longer the rates remain as low as they are, the more obvious it becomes that they’re no longer an effective monetary policy tool.
The Bank of England will announce its latest interest rate decision later today. The monetary policy committee, including departing Deputy Governor Charlotte Hogg, is expected vote to keep rates just above zero.
The Bank of England revealed today that it forecasts inflation to rise to 2.8%, well above its 2% target. The combination of rising prices, stagnating incomes and slowing employment growth is bad news for households, as they face a higher cost of living across the board.
According to new data from the Bank of England, consumer borrowing increased by its fastest rate for more than a decade in the run-up to the festive period, reaching levels not seen since the peak of the financial crisis. Consumer debt rose by 10.8 percent in total during the past 12 months – with credit card borrowing hitting a record high.
Positive Money is putting monetary policy on the political agenda. This was in evidence at the political party conferences this year, where we brought together all-star panels in packed-out rooms to talk about the need for a new form of monetary policy.