Interest rates latest: Bank of England to announce interest rates decision – BBC News

The UK’s central bank is set to announce its decision at noon, after holding rates at 5.25% since last summer.
Interest rates latest: Bank of England to announce interest rates decision - BBC News
interest rates latest bank of england to announce interest rates decision bbc news

Copyright: Reuters

The path of rates
matters economically, and politically too. These calculations are undoubtedly
affecting the thinking on the election timetable.

Yesterday I was
invited to Downing Street to speak to the prime minister about the state of the
economy in light of yesterday’s sharp drop in inflation. He surprised me with
how strongly he suggested the economy was turning around, going as far as
saying it was “bouncing back” and replying it was “not just him” who was seeing green shoots of recovery.

It seemed a strong
thing to say given that the UK is still officially in recession, albeit a mild
one.

Last month the chancellor told me that the turning point would be visible
for all to see when the Bank felt confident enough about low inflation, to cut
rates. Lower rates also help his budget sums add up, and could provide extra
room for manoeuvre to offer pre election giveaways.

The Bank has
communicated that despite the fact the headline rate of inflation is falling
rapidly, it is still looking at services inflation rising above 6% a year, and
has some concerns that wages and prices could remain sticky. It is not going to
cut, just because the energy price cap is falling.

Today will give us some
clues as to when that turning point will come. Sometime in summer is the
current expectation in markets.

Source: bbc.co.uk

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