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Bank of England's Kieran Dent Delivers Optimistic Economic Outlook

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Milton Keynes Business Leaders Partnership (MKBLP) recently hosted a Member's Breakfast where Kieran Dent, Bank of England Agent for the South East and East Anglia, delivered an insightful presentation on the current economic climate and the Bank's recent policy decisions.

In a landmark move, over the summer, the Bank of England announced its first interest rate cut in over four years, reducing the key rate to 5%. This move is, according to Mr Dent, part of a broader, more positive economic narrative.

"The main message is that we’ve cut interest rates, and from the Bank of England's perspective, it's an increasingly positive story," he stated. This sentiment is echoed in the Bank of England's latest Monetary Policy Report, which forecasts economic growth and a temporary rise in inflation to 2.7% by the end of 2024, followed by a decrease in 2025.

During his presentation, Mr Dent highlighted the notable rebound of the UK economy, with 0.7% growth in the first quarter of the year, effectively recovering from last year's dip. Inflationary pressures, largely driven by external factors such as energy and goods prices, are gradually easing, contributing to improved consumer confidence and a revitalised housing market.

“House prices are beginning to rise again, and housing investment is on the increase, reinforcing the sense of recovery.”

He also discussed how although the labour market had loosened over the past 18-24 months, the vacancy to unemployment rate remained high. This indicates a mismatch between available labour and job openings, which could give rise to more wage inflation should employers increase hiring as the economy emerges from last year's dip.

The session concluded with a lively Q&A where MKBLP members engaged with Mr Dent on topics such as whether trust and hope are considered within economic forecasts, the challenges of measuring underemployment, and the potential impacts of the new Government and the upcoming Autumn budget.

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