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I think interest rates will stay at 5.25%, place your bets...
You might get lucky, but others don't see it that way.
May 10 (Bloomberg) -- The Bank of England will probably raise its benchmark interest rate to a six-year high today to contain the fastest inflation in a decade, a survey of economists shows.
The nine-member Monetary Policy Committee will increase the Bank Rate a quarter-point to 5.5 percent, the highest since April 2001, said all 61 economists in a Bloomberg News survey. The bank announces the decision at noon in London. Eleven of 43 economists predict another move to 5.75 percent by the end of the year.
Gordon told me they are going up to 5.5%. Make no mistake!
Nothing to do with el Gordo. The first, and probably the only good, thing he ever did was giving independence to the Bank of England. However, the reason for that was so that he didn’t get the blame for the overdue need to raise interest rates.
The Bank of England’s Monetary Policy Committee today voted to raise the official Bank Rate paid on commercial bank reserves by 0.25 percentage points to 5.5%.
In the United Kingdom, output growth has remained firm. Business investment has been stronger than expected and, although indicators of consumer spending have been volatile, the underlying picture is one of steady growth. Credit and broad money continue to grow rapidly. The pace of expansion of the international economy remains robust.
CPI inflation picked up to 3.1% in March. Lower gas and electricity prices and weaker import price inflation mean that CPI inflation is likely to fall back to around the 2% target in the course of this year. But the margin of spare capacity in firms appears limited and there are signs that businesses are more able to push through price increases. Relative to the 2% target, the risks to the outlook for inflation in the medium term consequently remain tilted to the upside.
Against that background, the Committee judged that a further increase in Bank Rate of 0.25 percentage points to 5.5% was necessary to meet the 2% target for CPI inflation in the medium term.
The Committee’s latest inflation and output projections will appear in the Inflation Report to be published on Wednesday 16 May.
The minutes of the meeting will be published at 9.30am on Wednesday 23 May.
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