London, 27 September 2022 (TDI): The Governor of the Bank of England, Andrew Bailey has stated that the Monetary Policy Committee (MPC) will not hesitate to increase the rate of interest.

The statement has been published due to the present scenario of the pound falling against the dollar.

Sterling Pound against the Dollar

The pound drops against the dollar after cutting taxes by the Kwasi Kwarteng in the mini-budget the pound has gained some value and stabilized at 1.08$. Inflation could be doubled from 2.25% to 5.8% because the Kwasi cut taxes which will increase general spending.

Moreover, inflation would also increase in the coming future. So, in order to curb inflation, the bank of England will tighten its monetary policy indicators given by the Bank of England.

In addition, the investors have been frightened to reduce their buying of the Sterling. Some of the big building societies like Skipton, Virgin, and Halifax have reduced mortgage deals and were also withdrawn by the UK bank after the pound fell.

United Kingdom Chief Economist Samuel tomb says that the UK bank will call an emergency meeting to tackle inflation. Also, the MPC has made it clear that it would make a full assessment of the falling pound against the dollar, and act accordingly.

Moreover, the inflation in the UK will be increased because 46% of the food is imported to the UK so, it will cost high for UK residents. The gas for fuel is also imported to the UK. The pound has fallen 20% against the dollar since this year’s start and is considered the 20th worst-performing currency in the world.

In addition, the Argentine peso has fallen 27 percent against the dollar, the Turkish lira has fallen by 29 percent, and the euro by 15%. To accumulate all this information the people in the UK will face a 0.5 percent increase in their cost of living.

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