The Bank of England meets on Thursday with inflation well above its 2% target. In April, prices rose at an annual rate of 9%. But that does not mean a large interest-rate increase is imminent. The bank’s monetary policy committee is supposed to look beyond temporary shocks and consider the wider economic environment.
Recent data suggest there is no need to panic. Employee earnings do not yet point to a wage-price spiral. In the three months to April, pay excluding bonuses fell by 2.2%, after adjusting for inflation. If anything Britain’s slow economy is more of a worry. In April GDP fell by 0.3% relative to the month before, with manufacturing hurt by soaring costs and supply-chain disruption. Increasing rates too quickly could depress growth and medium-term inflation too much. So although some at the bank may push for an increase in the official interest rate of 0.5 percentage points, most expect it to raise interest rates by just half that.
The great uprooting
Over 100m people have been forced from their homes by war and persecution, the first time that figure has hit the grim milestone.