Our role is to set interest rates to influence the amount of spending in the economy in order to ensure inflation (the pace of price rises) returns to our 2% target sustainably.
Low and stable inflation supports growth and jobs.
Over the past few years, our economy has needed interest rates to stay very low as we recovered from the global financial crisis.
As our economy started to grow more quickly, and with inflation above the 2% target, it needed a little less support. So we raised the official interest rate from 0.25% to 0.5% in November 2017 and then from 0.5% to 0.75% in August 2018.
Since then, uncertainties over Brexit have increased, UK economic growth has slowed, and inflation has fallen back close to our 2% target. We have kept interest rates unchanged this month.
If the economy performs as we expect, we think upward pressure on prices will build over the next few years and we will need to raise interest rates a bit more to keep inflation low. We expect any rises in interest rates to happen at a gradual pace and to a limited extent. Interest rates are likely to remain substantially lower than before the financial crisis.
Our view is based on the assumption that there will be a smooth Brexit where households and businesses have time to adjust to the new relationship between the UK and the EU.
Whatever form Brexit takes, we will set interest rates to keep inflation low and support jobs and growth.
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