The MPC – now even more firmly under the control of doves following the recent surprise resignation of Viral Acharya – is likely to use the current low rate of headline inflation as justification for a fourth consecutive rate cut at the conclusion of its policy meeting on Wednesday 7th August. But with a growing perception that the central bank’s credibility is being eroded, further policy loosening raises the risk that inflation rebounds strongly and ultimately requires interest rates to be higher in the future.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services