CBI responds to latest Bank of England interest rate decision

Anna Leach, CBI Deputy Chief Economist, said:  

“The decision from the Bank of England to hold rates again for a second month running will be welcome news to hard-pressed households and businesses dealing with higher borrowing costs.

“However, with the backdrop of still high inflation, wage growth still well above levels consistent with the inflation target, and given services inflation actually rose in September’s data, monetary policy will need to remain tight for some time in order to decisively drive inflation back to target.

“The controversy surrounding the official labour market data is an extra complication for the Bank’s assessment of economic conditions. But a variety of data on the labour market, in combination with figures on economic activity, suggest that the economy is weakening and the labour market loosening in response to the highest interest rates for over a decade.

“The weakness of the UK’s economic performance necessitates a deftly delivered policy package to support a step-change in productivity, while also balancing the public finances.

“The CBI’s Autumn Statement recommends action in areas that can act as a catalyst to for unlocking business investment, including delivering an internationally competitive business environment; mobilising the potential and productivity of the UK’s workforce; and realising the UK’s net zero growth opportunity.”