However, the initial reaction for many will be that the BoE’s monetary policy committee has now lost any credibility it may have had.
Of course, with its narrow focus on inflation, the MPC has had its hands tied. While it was obvious to anyone in the real world that price pressures were almost totally due to energy costs, most of the MPC did what the government asked and focused on inflation. Realistically, nobody expected oil prices to halve in a few months, but once the dollar had so clearly turned, it was obvious they were going down.
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