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Bank of England does a nervous backflip

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Bank of England does a nervous backflip

What is the point of the Bank of England? Officially, its main duty is to control inflation.

Its far wider moral purpose is to ignore the whims of the bankers and traders all around it, to see through short-term events to the wider picture.

It is supposed to offer a clear and clever narrative of what it is thinking; to be the reassuring adult in the room, policing the noisy kids.

Today, it suddenly popped an ecstasy pill and did cartwheels all down Threadneedle Street.

Last month when many in the City expected it to raise interest rates, it held them. Today when widely expected to hold rates, given everything it had said in November, it put them up.

What changed in that period? Well, inflation rose, but the Bank’s narrative has always been that this is a passing situation.

That the far bigger issue is employment and growth. In other words, that in the longer term the danger is that inflation will be too low, rather than too high.

Today it ditched that, even in the face of soaring Omicron cases, which rather puts into doubt everything it has been saying for about two years.

It makes me nervous. What else are they unsure about?

Sell everything.

Our Find Out Now pol today asked 2000 people who read the FTThe TelegraphThe Times or The Guardian if they think rates should go up or stay the same.

Broadly, the more right-wing the newspaper, the more readers think rates should increase. There’s also a huge difference across age groups.

Press release of the day

Who are the pandemic profiteers, the stocks doing best from Covid, asks this from Qontigo.

It chose 20 US stocks that it felt most likely to benefit.

The analysis is quite technical with lots of charts, but it did make me click…

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