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Finance
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Uncertainty over March interest rate decision
Uncertainty over March interest rate decision
Speculation about the immediate future of interest rates has been rife, with opinion divided over whether or not the Bank of England's monetary policy committee (MPC) will raise or maintain rates.
Many commentators are predicting that interest rates will be frozen at 5.25 per cent, including analysts at Royal London Asset Management (RLAM), who believe that the Bank will wait until the effect of previous increases is fully understood before considering another move.
According to RLAM's Ian Kernohan, January's retail sales data was weak and the property market seems to be signalling that the recent rate rises are having an effect on the economy.
However, Simon Ward, chief economist at New Star, is less certain and believes that the decision could be close.
"Solid activity data - including today's buoyant manufacturing PMI - and strong business pricing plans argue for an increase, but inflation looks set to return to target sooner than forecast in the February Inflation Report, consumer price expectations appear to be moderating and wage settlements have picked up by less than feared," he commented.
"I am assuming the MPC majority will be prepared to wait for more evidence, but another five - four split looks quite possible."
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