It came as little surprise that the Bank of England’s MPC voted 7–2 to hold rates steady at 3.75%, particularly in the wake of the Memorandum of Understanding (MoU) between the US and Iran and the resulting plunge in oil prices. The UK’s inflation outlook, and by extension its monetary policy debate, remains outsourced to events in the Middle East (figure 1). The sharp retracement in energy prices, with Brent now actually flat on a year‑on‑year basis(!), has materially weakened the case for a near-term rate hike. The MPC rightly highlighted that risks to the energy price outlook remain skewed to the upside. The ... (full story)