CITY AM – Hold the line
Bank of England set to leave rates on hold as economy teeters on edge of recession
CITYAM SAYS The Bank of England looks set to leave interest rates on hold for a second time in a row when it meets on Thursday as the central bank attempts to bring inflation down to target without tipping the economy into a recession.
Economists think a majority of the rate-setting Monetary Policy Committee (MPC) will back leaving the Bank Rate at 5.25 per cent despite inflation remaining well above the Bank’s two per cent target, at 6.7 per cent.
Recent comments from MPC members suggest that the Bank has grown increasingly confident that the rate hikes already undertaken have helped temper price rises.
Earlier this month Andrew Bailey, the Bank’s Governor, predicted a “noticeable drop” in the headline rate of inflation next month and suggested there will be “more evidence” of easing inflation by the end of the year.
While Huw Pill, the Bank’s chief economist, recently said he was “reasonably confident” that higher interest rates were “bearing down on inflation”.
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