Chancellor Hunt Reaffirms Commitment To BoE's 2% Inflation Target

Annual price growth in the UK, which sat at 4.6% last month, has not met the Bank's 2% target since July 2021, reaching a peak of 11.1% in October last year.

In a letter to Bank of England governor Andrew Bailey as part of the chancellor's Autumn Statement on Wednesday (22 November), he said the government was "fully committed to the Monetary Policy Committee's independence".

ECB warns high rates are pushing economy towards fragility

The letters came more than a year since former prime minister Liz Truss considered curbing the Bank of England's independence as part of her leadership bid.

Hunt also confirmed that the Asset Purchase Facility will remain in place for the financial year 2024 to 2025, "and for as long as is needed".

The Bank of England Act 1998 requires the chancellor specifies the definition of price stability and the government's economic policy objectives at least once a year.

In a letter to the BoE's Financial Policy Committee, Hunt also warned that the risk environment for the UK remained "challenging against an uncertain economic backdrop".

Federal Reserve consensus set on keeping rates higher for longer

He added: "Recent stresses in the global banking sector highlight the continued importance of maintaining robust macroprudential, regulatory and supervisory standards, and I welcome the committee's continued work to respond flexibly to such events to contribute to financial stability."

Hunt also stated that the FPC should continue to "attach a high priority" to supporting the BoE's work to address systemic risks in the market.

"As global financing conditions remain tight, the close coordination of macroprudential and monetary policy will also continue to be of heightened importance," he said.

RECENT NEWS

ETF Market Update: Assessing The Impact Of Receding US Rate Cut Expectations

The ETF market has been subject to significant shifts in recent months, with one of the key drivers being the evolving e... Read more

Market Response: Understanding The Drop In Arm Shares

In the fast-paced world of technology, market reactions can serve as barometers of industry health and company performan... Read more

Market Watch: Investor Sentiment Points To Steady Rates As BoE Convenes

As the Bank of England's Monetary Policy Committee (MPC) prepares to convene, investor sentiment plays a pivotal role in... Read more

The Department Of Justice Vs. Google: A Clash Over Market Power

The culmination of the high-profile antitrust trial between Google and the Department of Justice marks a significant mil... Read more

Mitigating Risks In The Bond Market: Strategies For Uncertain Times

In today's volatile bond market, characterized by liquidity concerns and rising interest rates, effective risk managemen... Read more

UK High Street Banks Rake In £9.2 Billion In Interest On BoE Reserves: A Closer Look

In the intricate world of finance, where numbers often tell compelling stories, one recent figure stands out: £9.2 bill... Read more