Bank set to hold interest rates despite rising inflation

No desire to tinker with the rate at present despite climbing inflation
No desire to tinker with the rate at present despite climbing inflation

The Bank of England is expected to keep interest rates on hold next week, with new voting member and deputy governor Dave Ramsden unlikely to “rock the boat” despite forecasts of a further rise in inflation.

Economists predict the Bank’s Monetary Policy Committee (MPC) will hold rates at 0.25% as dovish members of the Monetary Policy Committee (MPC) continue to outnumber those calling for a hike, even as consumer prices push further past the Bank’s 2% inflation target.

“It looks a nailed-on certainty that the Bank of England will keep interest rates at 0.25% on Thursday after the September Monetary Policy Committee meeting,” Howard Archer, chief economic adviser at the EY ITEM Club, said.

“Furthermore, the case for an interest rate hike anytime soon currently looks pretty flimsy overall to us although sterling’s recent overall slippage may well be of some concern to the Bank.”

While MPC members Ian McCafferty and Michael Saunders are expected to vote for an increase, Mr Ramsden is likely to side with Governor Mark Carney and and deputy governor Ben Broadbent, who have been more cautious about unwinding the Bank’s post-Brexit vote stimulus measures.