9 November 2022 - Economy to shrink 10%

Latest projections indicate the impending recession may cause an economic contraction as great as 10%. In its latest forecast, the Bank of England that the economy will shrink over the course of eight quarters beginning with the current period. The projection is based on a forecast that short-term interest rates will reach 5.25%. The vote at last week’s MPC meeting was 7-2 in favour of a seventy-five-basis point increase. The two who voted against it were Silvana Tenreyro, who voted for a twenty-five-point hike and Swati Dhingra, who voted for fifty points. The appointment of Dhingra has made the overall position of the Monetary Policy Committee marginally more Dovish. This was her second meeting, and she has now voted for hikes below the agreed level on both occasions. Tenreyro, appointed in 2017, is considered a bit of a dove, having voted for small hikes at two of the past four meetings. But she appears to be more considerate about her view considering several factors when casting her vote.