Oil prices making BoE's job difficult
25 Nov 07

Although I have been arguing for a rate cut in December, rising oil prices are making the decision to do so a little harder.

Rachel Lomax of the Bank of England, said that "There are always risks in signalling that policy will be eased at a time of rising energy prices".

The uncertainty and the effects of the financial credit crisis give reason to cut rates, but have to be balanced by rising commodity prices.

Given Rachel Lomax's comments this week, it could be that the MPC will wait till early next year to lower the Bank Rate.

Links:
Oil clouds rate cuts, Bank says - BBC (23 Nov 07)