Melanie Baker is RLAM’s Senior Economist with over 19 years’ experience in the financial sector. She started her career at Morgan Stanley where she was an economist analysing currencies. She was Senior UK Economist at Morgan Stanley and analysed the UK economy and political risk events for more than a decade. Her period covering the UK included the aftermath of the financial crisis, Scotland’s Independence referendum and Brexit. She is a CFA charterholder and is also a Trustee of a local charity providing community childcare. She attended Edinburgh University and has a master’s degree in Economics from University College London
Commenting on the Bank of England’s decision to hold interest rates at 0.1%, Melanie Baker, senior economist at Royal London Asset Management said:
“Despite Governor Bailey revealing that today’s interest rate decision was a “close call”, the Bank of England has decided to keep rates on hold. However, they signalled a rate rise in coming months if the economy evolves as they expect.
“The Bank’s forecasts and comments sound consistent with a rate rise in February 2022, with some probability of a December 2021 hike, as the picture becomes much clearer on what has happened to the UK labour market following the end of the furlough scheme.
“However, the forecasts and commentary also confirm that it doesn’t make sense at this stage to expect a rate rise in coming months to mark the start of any rapid tightening of monetary policy.”4 November 2021
“UK inflation remains elevated and although we may not have seen another big jump in the CPI measure of inflation in September, there is more to come. Energy bills are among factors set to help push consumer price inflation further above the Bank of England’s target in the near term.
“Though some consumers will have benefited from higher pay growth, higher inflation is set to reduce real income growth for many and will add to some of the challenges facing the economy into 2022.”20 October 2021