The central bank said its rate-setting monetary policy committee (MPC) will postpone its next meeting, which was due to take place on Thursday 15 September, by a week as the UK observes a period of national mourning. In a statement, Threadneedle Street said: “In light of the current period of national mourning in the UK, the September 2022 monetary policy committee meeting has been postponed for a week. The committee’s decision will be announced at 12 noon on September 22.” The Bank was widely expected to raise interest rates by at least 0.5 percentage points, from the current level of 1.75% in response to inflation reaching its highest levels since the early 1980s. Since the central bank was given independence to set interest rates by then-chancellor Gordon Brown in 1997, it has rarely held meetings outside a tightly scheduled schedule, set at least a year in advance. Several additional emergency meetings have been held during times of economic crises, including the 2008 financial crisis and the Covid pandemic, but delays are unusual. An extra week will give the central bank more time to consider options to tackle inflation after Liz Truss announced plans to freeze household energy costs at £2,500 for a typical family for two years from October. Economists widely expect the move to limit further increases in inflation amid a surge in wholesale oil and gas prices exacerbated by Russia’s war in Ukraine. The government said the plan could reduce headline inflation by about five percentage points. However, the new prime minister gave no details on the cost of the plan, fueling speculation in financial markets about a massive increase in public borrowing this year, which has weighed on the pound in recent weeks. Global investors have also expressed concern over the prospect of policy intervention at the Bank, which could affect its ability to respond to inflation risk management. The package is expected to cost around £150 billion and could curb inflation while softening the impact of a recession. The Treasury has also asked the Bank of England to provide a £40bn liquidity program to help energy suppliers finance upfront energy purchases in the wholesale markets. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. The committee will be able to consider the latest data on the economy, labor market and inflation for August after the Office for National Statistics confirmed it plans to go ahead with publishing the figures as advertised next week.
