The Bank of England’s Monetary Policy Committee (MPC) is set to meet again this week. They will be expected to call a vote again to raise the standard base rate. However, this will more than likely be the 18th consecutive month to see the rate hold at 0.5 per cent.
For the last few months external MPC member Andrew Sentance has called to raise the rate by 0.25 per cent to a total of 0.75 per cent. It is expected he will call for a vote once more. He has not been able to gather any more members in the past votes to come to his side and the votes have failed to pass.
Analysts believe the MPC should take a conservative measure and allow the rate to sit. There are signs that though the economy saw growth of 1.2 per cent in the second quarter that it is slowing down. The construction sector saw a drop in orders, house prices fell slightly last month, and there was a loss of jobs in the service sector. Manufacturing saw a slow down as well.
With spending cuts due to come from the government and tax hikes coming in a few months, consumers will be finding themselves feeling the true economic state even more than now. Especially those that have job cuts due to the budget will feel the pinch. With consumer confidence down, the MPC would do well to leave the rate as is with inflation not out of control, so it is expected it will stay as is.