At close to 7%, services inflation has been only slightly weaker than expected in August. This downside news largely reflects lower-than-expected core goods price inflation. Twelve-month CPI inflation fell to 6.7% both in September and 2023 Q3, below expectations in the August Report. There remains uncertainty about the near-term path of pay, but wage growth is nonetheless projected to decline in coming quarters from these elevated levels. Pay growth has remained high across a range of indicators, although the recent rise in the annual rate of growth of private sector regular average weekly earnings has not been apparent in other series. Contacts of the Bank’s Agents have similarly reported an easing in hiring constraints, although persistent skills shortages remain in some sectors. Falling vacancies and surveys indicating an easing of recruitment difficulties also point to a loosening in the labour market. Against a backdrop of subdued economic activity, employment growth is likely to have softened over the second half of 2023, and to a greater extent than projected in the August Report. The increasing uncertainties surrounding the Labour Force Survey underline the importance of this approach. The MPC continues to consider a wide range of data to inform its view on developments in labour market activity, rather than focusing on a single indicator. GDP is expected to grow by 0.1% in Q4, also weaker than projected previously. Some business surveys are pointing to a slight contraction of output in Q4 but others are less pessimistic. UK GDP is expected to have been flat in 2023 Q3, weaker than projected in the August Report. Following events in the Middle East, the oil futures curve has risen somewhat while gas futures prices are little changed. Underlying inflationary pressures in advanced economies remain elevated. GDP growth has been stronger than expected in the United States. Since the MPC’s previous meeting, long-term government bond yields have increased across advanced economies. These are conditioned on a market-implied path for Bank Rate that remains around 5¼% until 2024 Q3 and then declines gradually to 4¼% by the end of 2026, a lower profile than underpinned the August projections. The Committee’s updated projections for activity and inflation are set out in the accompanying November Monetary Policy Report. Three members preferred to increase Bank Rate by 0.25 percentage points, to 5.5%. At its meeting ending on 1 November 2023, the MPC voted by a majority of 6–3 to maintain Bank Rate at 5.25%. The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. News and publications Open News and publications sub menu.Option-implied probability density functions Gross Domestic Product Real-Time Database The PRA’s statutory powers and enforcement Money Markets Committee and UK Money Markets Code Greening our Corporate Bond Purchase Scheme (CBPS) Operational resilience of the financial sector Wholesale cash distribution in the futureįinancial market infrastructure supervision
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