Update from the Bank of England on interest rates, the new £50 note and the future of money

Lai Wah Co, Bank of England Deputy Agent for Greater London, explores three recent announcements by the Bank. All of them relate to money in one way or another. One was about the official interest rate set by the Bank; one was about the new fifty pound note; and one was about the future of money itself.

Lai Wah Co, Bank of England Deputy Agent for Greater London

The outlook for interest rates

On interest rates, the Bank’s Monetary Policy Committee (MPC) recently provided its latest assessment of the economy and the path of interest rates needed to bring inflation back to the 2% target over the coming few years.

The MPC think the economy is now close to full capacity – I hear from businesses in Greater London for example that they are struggling to recruit staff or that they have no more space or equipment with which to grow.

That means that if the economy performs as the MPC expects, interest rates  may have to rise gradually from 0.75% towards around 1.5% over the next two or three years.

Of course, there is still a great deal of uncertainty about the outlook for the economy because of Brexit. As a result, the path of interest rates set by the Bank will depend on the nature of future trading arrangements and whether there is a smooth transition to them.

Importantly, whatever happens, the Bank will set interest rates in a sustainable way to ensure that inflation returns to target, while supporting jobs and activity during this most important time of change.

The new fifty pound note – think science!

On 2 November, the Bank announced the start of the character selection process for the new polymer £50 note.

The character is to be drawn from those from the UK who have made an outstanding contribution to science.

What’s more, the public are invited to nominate the scientist they would most like to see on the new fifty.

If you’d like to learn more about the selection process and how to submit an idea, please visit the Bank’s website.

The future of money

And it’s not just the future of the £50 note we are thinking about: we’re asking the public to talk to us about the future of money, in all its various shapes and sizes.

The Bank has launched its annual Future Forum to hear what people think about topics ranging from the rise of cashless payments, to crypto assets and financial technology.

As part of the event, the Bank’s Governors will be hosting live online Q&A sessions – so this is your chance to talk directly to Mark Carney and his senior colleagues. There are also great opportunities for youngsters to get involved. For more information visit www.bankofenglandfutureforum.co.uk.

Meanwhile, my colleagues and I in the Agency network continue to meet with our contacts in companies and charities to deepen our understanding of what’s happening in the economy in every part of the United Kingdom including West London.

Stay in touch with the work of the London Bank of England team on Twitter @BoELondon