Get the free Morning Headlines email for news from our reporters across the world Sign up to our free Morning Headlines email
Please enter a valid email address
Please enter a valid email address
SIGN UP
I would like to be emailed about offers, events and updates from The Independent. Read our privacy notice
Thanks for signing up to the
Morning Headlines email
{{ #verifyErrors }} {{ message }} {{ /verifyErrors }} {{ ^verifyErrors }} Something went wrong. Please try again later {{ /verifyErrors }}
The Bank of England is expected to keep interest rates at the same level on Thursday as it continues to wait for further evidence that inflation is falling.
Financial markets are predicting that the base rate will remain unchanged at 5.25 per cent for the fifth consecutive time.
It will be welcome relief for homeowners who sufferef 14 consecutive increases in 2022 and the first half of 2023 from 0.1 per cent up to the current rate, prompting mortgage rates to rise sharply.
The BoE hiked the rate so quickly in order to curb inflation which skyrocketed as high as 11 per cent in 2022. The BoE’s target is to get inflation down to 2 per cent.
Members of the BoE’s Monetary Policy Committee (MPC), who make the decision on rates, will be keeping a keen eye on Wednesday’s inflation figure, with it widely expected to fall to 3.5 per cent, down from 4 per cent.
RECOMMENDED
The uncomfortable truth about Kate and William nobody wants to admit
Undo
Piers Morgan claims he has heard ‘alarming things’ about Kate Middleton
Undo
British Investing
How To Invest In Whisky. Own A Barrel Of WhiskyBritish Investing| Sponsored Sponsored
Undo
Volvo Cars
Save up to ￡9,000 on a new VolvoVolvo Cars| Sponsored Sponsored
Undo
Powered by Taboola Powered by Taboola
Last month, Andrew Bailey, the BoE’s governor, said the 2 per cent target it likely to be met in the spring and he wanted to see further sustained progress on inflation in the services sector, pay increases and the labour market, before reducing interest rates.
Promoted stories
Nutritional Science Ltd
Joint Doctor Begs Brits To “Mend” Joints With This Tip (Every Morning)Nutritional Science Ltd
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
He told the Treasury Select Committee: “We’ve seen, I think, encouraging signs on them. So, services inflation is still above 6%, there are some signs of it coming down now,” Mr Bailey said.
“I think some signs that pay is now adjusting down towards the lower headline inflation, which is what I’d expect to see.
“The quantity side of the labour market remains tight, there’s no question about that. But it’s the progress of those three things.
“We don’t need inflation to come back to target before we cut interest rates, I must be very clear on that, that’s not necessary.
“We’ll be looking for sustained progress on those things to reach that judgment about how long this period of restrictive policy needs to be.”
Despite the falling inflation, experts are expecting that only one of the Bank’s nine-strong rates setting committee to vote for a cut on Thursday.
Sandra Horsfield, an economist at Investec, said: “The Monetary Policy Committee (MPC) of the Bank of England will announce its next policy decision next Thursday at midday.
“The decision itself looks likely to be straightforward: at the time of writing, the market prices in only a negligible chance of a policy rate change next week. We concur, expecting a steady Bank rate of 5.25%.
“Much as at the last meeting though, we think clear divergences of preferences within the MPC will persist: as in February (which had been the first such instance since August 2008), we expect a three-way split in the vote, with one member voting for an immediate rate cut (Swati Dhingra), probably still two for another hike (Catherine Mann and Jonathan Haskel) and the clear majority opting for no change.”
Sarah Coles, personal finance expert at Hargreaves Lansdown, told The Sun: “At the end of last year, the markets were fairly convinced we would get a Bank of England rate cut in May or June, but sticky inflation at the start of the year forced them to re-think.”
“At this stage, May is looking highly unlikely, June is in the balance, and the market is increasingly expecting an August rate cut.”
More about Interest Rates Bank Of England
Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies
1Comments
1/ 1Bank of England set to hold interest rates for fifth time running
Bank of England set to hold interest rates for fifth time running
Members of the BoE’s Monetary Policy Committee (MPC), who make the decision on rates, will be keeping a keen eye on Wednesday’s inflation figure, (Yui Mok/PA)
PA Wire
Nutritional Sciences Ltd
Urologist Begs Brits To Shrink Prostate With This Tip (Every Morning)Nutritional Sciences Ltd| Sponsored Sponsored
Undo
Travel Deals
Last Minute Holiday in Tenerife (All Inclusive Deals)Travel Deals| Sponsored Sponsored
Undo
AMK Legal
Unexpected Compensation for St James's Place (SJP) ClientsCurrent or former clients of St James's Place could be due compensation - click to find out more. Regulatory changes from 2012 onwards to ensure that nearly all investments and pensions now have built-in advisor charges.AMK Legal| Sponsored Sponsored
Learn More
Undo
Lasik Eyes
Uncovered: People Are Now Ditching Their Glasses for This!Lasik Eyes| Sponsored Sponsored
Undo
？ Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Subscribe
Already subscribed? Log in