Rumours were that, if interest rates went up, it would be by 25, not 50 ‘basis points (a quarter rather than a half percent, in old money). But they’ve gone for the full half. Here’s me supposed to understand economics, knowing all the theory of monetary policy, and I still don’t get it. Do they think hiking interest rates is ‘bringing inflation under control’, rather than the fact that oil and gas prices have fallen by nearly 50% in recent months? Will banging up the cost of their mortgages stop striking workers asking for more money? And how will ‘easing labour shortages’ by ensuring employers can’t afford to hire anyone, ward off the long-threatened recession? We’re not America (thank the Lord), we’re never again going to be close to energy, food or car self-sufficiency and ‘reconnecting with the world’ actually means there’s not much we can do about anything; well, not if we carry on as we are. A rethink at many levels is needed. I’d say. Rant over.
The ‘meets expectations’ is the key here. The BofE feels obliged, as it’s their ‘job’ to keep inflation under control, to keep pushing up interest rates until it is.