The Guardian reported Tuesday that Bank of England Deputy Governor for Monetary Policy Clare Lombardelli has not decided how she would vote on a December rate increase after last week’s hike to 4%.
She said the conflict in the Middle East, energy prices and broader economic data will inform her view. Asked about another increase, she said, “But I wouldn’t rule it out.”
The nine-member Monetary Policy Committee voted 8-1 to raise Bank Rate from 3.75% to 4% on Nov. 5. It was the Bank’s first increase since August 2023. Lombardelli backed the quarter-point move, while Monetary Policy Committee member Catherine L Mann preferred a 0.5-percentage-point rise.
In her explanation of the Nov. 5 vote, Lombardelli pointed to the possibility of another near-term increase if incoming data offered no sign that inflation was cooling. The Bank said prolonged high energy prices have increased the risk that costs will spread into wages and other prices. It will assess at each meeting the risk that high energy prices could push those costs higher.
Consumer Prices Index (CPI) inflation reached 3.5% in September, up from 3.1% in August, the Office for National Statistics (ONS) said. The Bank projects inflation will be around 5% by mid-2027, above its 2% target.
Bank Rate affects borrowing and saving decisions across the economy. The Bank has said higher rates can increase borrowing costs while making saving more attractive, as policymakers weigh inflation against economic conditions.
Hiring conditions also feature in Lombardelli’s assessment. She told The Guardian that employers were keeping current staff but delaying recruitment, leaving people entering the workforce more exposed. The ONS reported unemployment of 4.7% among people aged 16 and older in June through August and a decline in vacancies.
The ONS is due to publish the next labor-market figures Nov. 17, with October CPI data due Nov. 18. The Bank’s next rate decision is scheduled for Dec. 17.
