On March 19, the Bank of England unanimously voted to keep interest rates unchanged, marking the first time in four and a half years that the Bank of England made a decision without any dissenting opinions. The atmosphere at this meeting represented a significant shift. The Middle East conflict has disrupted production in the world's most important oil-producing regions and hampered tanker transport through the crucial Strait of Hormuz. Interest rate makers have opened the door to a possible rate hike, with Governor Bailey warning that policy must "address the risk of a more lasting impact on UK CPI."
In another statement, he added, "Regardless of the outcome, our responsibility is to ensure that inflation returns to our 2% target." The Bank of England removed the phrase "the benchmark interest rate may be lowered further" from its February statement. Dinglar, the Bank of England's most dovish member, stated that a prolonged energy supply crisis would necessitate a rate hike. Several rate-setters indicated they would have supported measures to lower borrowing costs had the conflict not erupted. (Jinshi)
