CBI responds to UK interest rate decision

Alpesh Paleja, CBI Lead Economist, said:

“The decision to raise interest rates signals that the MPC want to get off on the front foot in tackling rising inflation. We’re likely to see at least a couple more rate rises, as flagged in previous commentary from the Committee.

“However, the emergence of the Omicron variant has raised uncertainty over the near-term outlook, so the MPC will likely move more cautiously. We could even see a return to the Committee’s holding pattern on monetary policy, if there are strong signs of either the virus or Plan B restrictions dampening activity and price pressures

“But in either scenario, it’s important to remember the overall stance of monetary policy will remain very accommodative going forward.”