One might comment that Mark Carney acted a little too rashly last June following the UK’s shock vote to leave the EU. The Governor of the Bank of England reduced rates from the then historic low of 0.5% to a new low of 0.25% after warning something akin to a second great recession could hit the UK in the wake of a leave vote.

But nearly a year on, the central bank’s Monetary Policy Committee (MPC) were close to raising interest rates once more, voting five-to-three to keep rates at their current levels, with Carney remaining resolute in holding at 0.25%. The votes to raise the base rate are likely influenced by steadily climbing levels of inflation, which look set to go above 3% before the end of 2017. Add to this the mix of stagnant wage growth and a weak pound and you get the recipe for reduced consumer spending. 

An increase in interest rates would put a squeeze on inflation, which is currently sat at 2.9%, well above the Bank of England’s target inflation rate of 2%. After the minutes of the MPC’s meeting were released, the pound enjoyed a pleasant surge in value up to $1.2795 amid hopes a rate increase was imminent, but economists remain unsure. Conversely, the US Federal Reserve decided to plough ahead with a planned rate increase from 1 to 1.25% despite concerns over falling levels of inflation there. 

Are the central banks right in their steadfast commitment to current policy? We’ll be keeping an eye on it to make sure.