In its recent meeting, the Shadow Monetary Policy Committee (SMPC) decided to cut the Bank rate from 4.5% to 4%, with the majority favoring this move amid concerns regarding US tariffs and economic growth. The decision reflects a need for monetary easing as tariffs tighten economic conditions and reduce fiscal flexibility in the UK. The SMPC's focus is on bolstering consumer and business activities, while maintaining an eye on potential inflation increases. Members also discussed ending quantitative tightening due to increasing economic uncertainties.
The Shadow Monetary Policy Committee voted to reduce the Bank rate to 4%, primarily driven by concerns over economic conditions and the need for easing monetary policy.
The majority believed that with US tariffs exerting pressure on economic conditions, monetary policy could support consumer and business activity amidst less fiscal flexibility.
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