Bank of England to Weigh a Rate Increase After a Jump in Inflation
New York TimesDec 23, 2022
The Facts
The Bank of England (BoE) voted 7-2 Thursday to raise interest rates another 0.25%, bringing the benchmark rate to 4.25%. It also said it expects inflation to cool faster than expected despite a surprise jump in prices last month.
Previously, the central bank indicated it might pause rate increases, but BoE Gov. Andrew Bailey said despite expectations that inflation will fall, "we need to see that happening."
The Spin
Establishment-critical narrative
Just as Boris Johnson is answering for his mistakes and the US Fed for its role in recent bank failures, the BoE cannot be let off scot-free. The bank was slow to act when inflation began, crippling the economy, and has since poorly implemented solutions. Although these rate hikes are necessary, those in charge at the BoE should be held accountable for their failures.
Pro-establishment narrative
Though Britons may not have felt it quite yet, wholesale energy prices have fallen significantly, which means prices of goods are expected to follow suit in the near future. The BoE has brought this about through its rate hikes, the most recent of which will likely be the end of its monetary tightening as the economy shifts back toward normal. This economic crisis has been a complicated battle, but projections show the UK will soon see the light at the end of the tunnel.
