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Bank of England will keep interest rates on hold at 5%, analysts predict
May 6 2008 by Tony McDonough, Liverpool Daily Post
CITY analysts believe the Bank of England’s Monetary Policy Committee will not cut interest rates on Thursday, despite grim economic forecasts.
A poll of 65 analysts carried out by Reuters shows just five expect a change in the current 5% rate.
However, when asked about the June interest rate meeting, 40 said they believed the MPC will then be ready to make another quarter-point cut.
The policymakers cut rates from 5.25% to 5% last month, but hawkish members of the committee still fear rising inflation.
Arch-dove David Blanchflower clearly looks as if he will call for lower rates. He said a few days ago the economy faced recession and house prices crashing 30% if the central bank did not take urgent action.
But hawks like Andrew Sentance and Tim Besley seem worried about rising prices – they opposed last month's quarter-point cut.
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