International Monetary Fund urges Bank of England to act on inflation concerns

Inflation expected to hit 5.5% next year

The International Monetary Fund (IMF) has warned the Bank of England against having to face “inaction bias” ahead of stronger-than-expected inflation, urging the bank to begin raising rates before inflation reaches a projected 5.5% in the spring.

According to the IMF's annual review of the economy, the country's recovery from the coronavirus pandemic has been far stronger than expected, despite the fact the new Omicron variant will likely cause a "mild slowdown" over the next quarter. The BoE's Monetary Policy Committee caused a stir last month when it decided to hold interest rates, despite warning markets that rates will have to rise before Christmas. Now, following the spread of the Omicron variant, the bank is expected to hold interest rates once more during its MPC meeting this Thursday (16 December). Andrew Bailey: MPC r...