The Monetary Policy Committee (MPC) of the Bank of England meets regularly to determine the benchmark interest rate (Bank Rate) in order to achieve the government's inflation target.
The MPC is most likely to increase interest rates if
the economy is experiencing a widening negative output gap.
the exchange rate is appreciating rapidly, leading to lower import costs.
the annual growth rate of nominal wages significantly exceeds the growth rate of labour productivity.
consumer confidence declines, leading to a sustained rise in the household saving ratio.
