The Bank of England held its regular meeting to discuss interest rates last Thursday.
They voted to hold interest rates at 4.5% as had been widely expected prior to the meeting.
The Bank targets an inflation rate of 2% and has already predicted that inflation will rise this year before dropping at the end of the year. However, inflation for the 12 months to January 2025 increased to 3.0% from 2.5% in December, a much higher and faster increase in inflation than had been expected.
The Bank have been taking a cautious approach to reducing the rate, and more cuts are expected during 2025. However, with the increases in the amount of national insurance paid by employers and national minimum wage rates taking effect in April, the Bank is having to tread a fine line between slowing price rises and risking damaging the economy by having rates too high.
With many families finding out where their child will be starting school this September, now is a good time for working parents to start planning childcare. The government’s Tax-Free Childcare scheme can save them up to £2,000 a year per child – and this could be good news for employers as well as employees.
The government has published its Impact Assessment on the Planning and Infrastructure Bill, which indicates benefits to the economy of potentially up to £7.5 billion over the next decade.
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