Bank of England holds rates as inflation expected to rise again

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THE BANK of England decided to keep interest rates steady yesterday, and economists predict rising inflation will stop the Monetary Policy Committee (MPC) from printing more money any time soon.


The economy is believed to be stuck in a “zig zag” of quarters of growth followed by quarters of contraction or stagnation.


But high inflation – the latest figures put the consumer price index at 2.7 per cent in the year to November – mean the traditional remedy of cutting rates or using more quantitative easing is unlikely to be an option.

“We expect inflation to rise above three per cent over the next few months, to an extent due to the hikes in utility tariffs already announced, but also because we judge that there is further upside to food price inflation,” said Philip Shaw from Investec.

Courtesy:  cityam

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