The International Monetary Fund urged the Bank of England on Tuesday to avoid an 'inaction bias' when it comes to raising interest rates as it forecast British inflation would hit a 30-year high of around 5.5% next year.
The International Monetary Fund urged the Bank of England on Tuesday to avoid an “inaction bias” when it comes to raising interest rates as it forecast British inflation would hit a 30-year high of around 5.5% next year.
But the central bank held off from a widely expected rate rise last month due to concern about the impact of the end of the government's job furlough programme, and is expected to do so again on Thursday due to the spread of the Omicron coronavirus variant. “It would be important to avoid inaction bias, in view of costs associated with containing second-round affects. Careful communication would be needed to lay the groundwork with markets for potentially more frequent policy moves,” it added.
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