The Turkish Central Bank said on Thursday that it would tighten monetary policy in the event of a significant and sustained deterioration in inflation expectations, warning at the same time that geopolitical developments and price expectations pose risks to the path of declining inflation.
The bank stated, in the minutes of the Monetary Policy Committee meeting, that it is closely monitoring the impact of geopolitical developments on inflation expectations in Türkiye, through cost channels, economic activity and expectations.
Amid increasing uncertainty resulting from geopolitical developments, energy prices remain high and volatile. The duration and scope of uncertainty related to energy supplies, supply chains and transportation costs will remain critical factors in determining the future path of energy prices.
Consumer prices rose by 1.84 percent in August, while annual inflation fell by 0.24 percentage points to 31.51 percent. During this period, the main driver of consumer price inflation came from the sharp rise in energy prices amid geopolitical developments and its impact on transportation services, in addition to education and communications services.
Next Sunday, the city of Riyadh will host the third edition of the International Facilities Management Conference and Exhibition (SFMA EXPO 2026), under the patronage of the Minister of Municipalities, Majid bin Abdullah Al-Hogail, during the period from 20 to 22 September, at the Riyadh International Convention and Exhibition Center, under the slogan “Smart Facilities... Smart Cities.”
The conference was organized by the Saudi Facilities Management Association, with the participation of more than 225 entities, more than 200 local and international speakers, in addition to more than 120 workshops, to discuss a number of specialized topics in facilities management, modern technologies, operation, maintenance and sustainability solutions, and their role in raising the efficiency of facilities and supporting the transition towards smart cities.
The conference's proceedings address a number of topics, most notably technology and digital transformation, digital twins and predictive maintenance, sustainability and environmental and social governance, operation and maintenance, strategies for the work environment and hybrid offices, project and financial management, leadership and strategy, in addition to the health and well-being of building occupants.
The conference will be accompanied by an international exhibition in which government agencies, companies, and providers of services and technologies specializing in facilities management participate, to review modern solutions and practices in the sector, in addition to an innovation area and specialized workshops.
The conference comes in light of the growth witnessed by the facilities management sector in the Kingdom, with the market size exceeding 180 billion riyals ($48 billion) in 2024, with expectations of annual growth exceeding 7 percent until 2030, driven by the expansion of smart city projects and major projects, and the growing demand for operation, maintenance, and asset and facility management solutions.
The Bank of England kept interest rates unchanged on Thursday, but toughened its tone on inflation risks, expecting the rate of price increases to exceed 4 percent early next year, and warning that continued conflict in the Middle East and turmoil in energy prices for a prolonged period could prompt it to tighten monetary policy again.
The Monetary Policy Committee voted by 6 votes to 3 to keep the interest rate at 3.75 percent, while three members supported raising it to 4 percent, in line with the average expectations of economists in a Reuters poll.
But the minutes of the meeting showed a more stringent shift in the bank’s tone, with increasing risks surrounding the path of inflation, especially in light of the continued rise in global energy costs.
Conservative Andrew Bailey said: “So far, rising global energy costs have had a limited impact on the setting of prices and wages in the UK. “But the longer these fluctuations persist, the greater their impact on inflation, and the more likely we will need to raise the bank’s policy rate to ensure that inflation returns to our target level of 2 percent.”
The bank explained that inflation risks have tended to rise more since the publication of its latest economic forecasts in July, noting that energy price movements since then resemble a “negative” scenario that entails the risk of inflation consolidation.
Although there are no signs yet of continuing pressures from the labor market or companies' pricing policies, the bank said that these risks are increasing.
Inflation is heading to 4%.
The Bank of England raised its estimate for British economic growth in the third quarter to 0.4 percent, from 0.1 percent in its previous forecast. But on the other hand, he expected inflation to “now exceed the 4 percent barrier slightly” by early 2027, compared to a previous expectation that the peak of inflation would reach 3.2 percent in late 2026.
The inflation rate reached 3.1 percent in August, remaining above the bank's target of 2 percent, while policymakers tightened their tone about the risks of continued price pressures.
The bank said: “Given the time period it takes for the effects of the second round (of inflation) to appear, it was not appropriate to wait long to obtain evidence of these effects before taking monetary policy measures.”
Chief Economist Hugh Bell and external members of the Monetary Policy Committee Megan Green and Catherine Mann again voted in favor of raising interest rates by a quarter of a percentage point.
On the other hand, Bailey and his deputies Sarah Breeden, Claire Lombardelli and Dave Ramsden indicated, in the minutes of the meeting, the possibility of raising the base interest rate in the future if economic developments required it.
Change in bond plan.
In conjunction with the interest rate decision, the Bank of England made a major change in its approach to reducing its holdings of British government bonds, which had accumulated during previous periods of monetary stimulus.
The Monetary Policy Committee announced that it aims to reduce its holdings of government bonds held for monetary policy purposes to zero by 2034, while retaining some of the very long-term bonds that the bank has purchased to support the issuance of banknotes.
In a shift from the previous approach based on active selling of bonds in the market, the bank decided to hold bonds maturing before 2035 until their maturity date, while it will study the possibility of selling bonds maturing between 2035 and 2049 to the government.
The bank is scheduled to announce its plans regarding these bonds before next April, while it has decided at the present time to suspend all active sales of government bonds in the market.
