Here is a brief summary of the central bank’s assessment of the British economy.
On Wednesday, the Bank of England reported that although British consumers are coming under increasing pressure from rising inflation, the weakening sterling was boosting export volumes and that business investment plans are growing from strength to strength.
This assessment from the country’s central bank is broadly in line with the assessment of its regional agents. Last week, three of the BoE’s eight rate-setters unexpectedly voted to increase the cost of borrowing.
“In light of the further increase in price inflation for retail goods … annual sales growth in volume terms had continued to slow. Higher price inflation in areas such as food had also squeezed consumers’ ability to fund discretionary big-ticket purchases such as homeware,” said the bank in a statement.
The central bank also noted that businesses had reported reduced inflows of migrant labours from Europe, due to concerns of their residency status after Britain leaves the EU and the weakening of the pound.