By raising Bank Rate by 50 basis points on 4 August – the Monetary Policy Committee’s biggest hike in its 25 years, and the Bank of England’s highest jump since February 1995 – Governor Andrew Bailey is honouring the commitment made to an OMFIF-invited audience that the MPC ‘will, if necessary, act forcefully… no ifs and buts’ to get consumer price inflation back to its 2% medium-term target. The rate rise, to 1.75%, was the sixth since December, but it still leaves real rates deep in negative territory (see Figure 1). When Bank Rate was last raised by 50bp, it stood at over 4% in real (consumer price index-adjusted) ... (full story)