RE: Base rate cut by 0.25% to 4%7 Aug 2025 12:09
Gate
"Insanity with inflation on the rise"
Yes they seem to be ignoring their primary task dont they?
Not sure I agree with him, but Alan Taylor's views were minuted as follows:
"Underlying disinflation continued. Absent external shocks, domestic inflation, especially in services, was tightly linked to wages. The labour market had slack and was deteriorating further. Wage settlements had fallen to around 3.5% in the first half of 2025 and were expected to fall further in the second half. The inflation hump was expected to normalise, being dominated by one-off changes in tax and administered prices, and food inflation in a limited set of items, neither related to demand pressure. Energy futures curves were flat. With a US average tariff rate near 20%, trade diversion would slowly permeate, pushing down on inflation. UK sentiment was weak, with subdued consumption and investment. This picture was one of downside risks in coming years, namely: inflation below forecast, and activity weak or an increased risk of recession. For insurance against this balance of risks, a less restrictive policy was warranted."