It reflects what businesses tell us they are less confident about hiring staff due to sky-high employment costs and a tidal wave of new employment legislation coming down the track. While there has been some easing of cost pressures - with average earnings including bonuses slowing to 4.7 per cent in the three months to October - labour costs remain a challenge.
The decision reflects the MPC's view that, although inflation has peaked, further evidence is needed to confirm a sustained return to the 2% target. The latest ONS figures show CPI at 3.8% in September, broadly in line with BCC's forecast of 3.7%. The IMF also expects the UK to record the highest inflation in the G7 this year and next. So, the key question is: will UK inflation stay higher for longer, and will interest rates remain higher to control it?
Today's figures are a stark warning: retail jobs have plunged to a record low with 97,000 jobs lost over the last year, and almost 400,000 lost over the last decade. The rising cost of NICs and NLW, together costing the industry over £5 billion this year, are hitting retail employment hard. And worse could be yet to come, with the Employment Rights Bill having a "materially negative impact on employment" according to the OBR.
