- Economists expect base rate to be left unchanged at 5.25%
- Policymakers paused two-year rate raising cycle at last meeting in September
- Reuters poll of analysts said 61 out of 73 expect Bank’s MPC to keep rates steady
Borrowing costs will stay higher for longer as the Bank of England is expected to hold interest rates at a 15-year peak for the second time in a row next week.
Economists expect the base rate to be left unchanged at 5.25 per cent on Thursday.
Policymakers paused the two-year rate raising cycle at the last meeting in September following 14 consecutive increases, which have caused mortgage costs for homeowners to soar.
A Reuters poll of analysts said 61 out of 73 expect the Bank’s monetary policy committee (MPC) to keep rates steady when they meet on Thursday.
It comes after the European Central Bank decided to hold rates last week, and ahead of a meeting of the US Federal Reserve on Wednesday, when bankers are also expected to leave rates unchanged.
Peak: A Reuters poll of analysts said 61 out of 73 expect the Bank’s monetary policy committee to keep interest rates steady when they meet
At the MPC’s last meeting in September, when it held rates, four out of nine members voted in favour of raising them to 5.5 per cent.
‘It would only take one committee member to change their mind to tip the balance in favour of more tightening – but we’re doubtful,’ James Smith, a developed markets economist at ING, said.
He said that there had been little new data since the last vote, so those who opposed hiking rates are unlikely to change their minds.
Investec analysts said: ‘The case for raising rates further now does look somewhat weaker for a number of other reasons.’
They cited soft economic data including lower than expected inflation in September, worse gross domestic product than in prior forecasts, and weak retail sales and consumer confidence.
‘It is not a fully coherent picture, but one consistent with the economy at the early stages of entering a recession,’ Investec said.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘The economy is flatlining, with growth proving very elusive, showing that demand is being squeezed out.
‘If wage growth and goods and services price increases keep heading down, it’ll make policymakers more adverse to another hike.’
The Bank will also publish economic forecasts this week, which is likely to include a cut to its growth outlook in more gloomy economic news.