Overview
- Alan Taylor, an influential member of the Monetary Policy Committee, said he is comfortable keeping the Bank Rate at 3.75% unless a ‘worst‑case’ energy shock forces a change.
- The Bank’s Decision Maker Panel found firms now expect to raise prices by 4.0% over the year, down from 4.4% in April, which eases immediate second‑round inflation concerns.
- Fewer businesses plan to pass higher energy costs to customers and 68% expect squeezed profit margins, suggesting many firms may absorb costs rather than lift consumer prices.
- The survey also pointed to a cooling jobs market with firms planning a 0.4% fall in staffing and holding expected wage growth at 3.4%, which supports a cautious policy stance.
- Markets broadly price a June 18 hold but retain some chance of later quarter‑point hikes if oil and gas prices tied to the Iran conflict drive persistent inflation, a risk policymakers are monitoring.