All other things being equal, in which one of the following circumstances is the Bank of England most likely to increase the Bank Rate to maintain financial and macroeconomic stability?
An increase in household debt-to-income ratios accompanied by rapid growth in commercial property prices and lax bank lending standards.
A significant appreciation in the exchange rate of sterling alongside a persistent contraction in the domestic manufacturing sector.
An increase in the household savings ratio accompanied by falling consumer confidence during a period of fiscal consolidation.
A sustained decrease in global commodity prices that lowers domestic short-run aggregate supply costs.
