On Thursday, the bank kept rates on hold at 5.5% despite pressure to cut rates after increasing signs of a consumer spending slowdown. But most economists believe that this decision makes the need for a cut next month, all the more pressing. But the MPC is charged with keeping a lid on inflation which is currently running at 2.1% instead of it’s 2% target.
January 12, 2008
Base rate held at 5.5%
January 8, 2008
Rate cut or rate hunch?
The Bank of England will come under intense pressure to cut interest rates this week as figures out show that the high street suffered its worst Christmas for three years. Retailers endured another difficult day on the Stock Exchange amid mounting fears of possibly one of the toughest trading spells in recent memory. The gloom surrounding the economy may deepen if, as expected, Halifax reports that house prices fell again in December for the 4th consecutive month – making a case for a speedy rate cut. However, many economists believe that fears over inflation, fuelled by record petrol prices and rising gas bills, may force the Bank of England to wait until February or March before taking the next move down. The decision on interest rates will most definitely be a close call.
