Bank Rate Forward Planning

To combat elevated inflation, the Bank of England prime rate was set at an extremely high level. As such, the United Kingdom has crushed the inflation that was eating away at its growth, has now entered a period of real growth for the first time and is now the world's fastest growing economy. This fall in inflation has two primary drivers: interest rates, and the strengthening pound due to bond traders buying huge quantities of Sterling in order to buy UK Bonds. As Bank governor, my primary aim will be to keep real growth in the positive, and all other objectives will be in the service of this one. As it stands, this primarily means deleting inflation, but a rate of inflation too close to zero risks tipping the economy into deflation. As such, investors can expect rates to decrease in the short to medium term, and should plan their investments accordingly. However - should the real GDP Growth begin to dip again due to increases in inflation, rates will rise to counter it. - Sheev