CBI responds to MPC interest rate decision - September 2024

Alpesh Paleja, Interim Deputy Chief Economist said:

“The Monetary Policy Committee was widely expected to hold fire this month, after the first rate cut in four years in August. There remain very varied views among the MPC around the degree of inflation persistence, and over what horizon this will dissipate.

Monetary policy will be walking a fine line for a little while yet: between balancing upside risks to inflation, but not being too tight, so as to choke off activity. Developments in fiscal policy in October’s Budget will also be a key consideration for growth prospects.

We still anticipate another rate cut in November, and a few more next year, in line with the MPC moving at a slow but steady pace. On their own, lower interest rates will be a welcome respite to households and businesses.”