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Interest rate hold predicted

02 June 2008

The Bank of England's monetary policy committee (MPC) is unlikely to vote for a cut on interest rates this month, a new poll has revealed.

According to the survey of eight economists and financial institutions by Adfero, the base rate will remain at five per cent for June following the MPC's two-day meeting later this week.

Zoe Stevens at Nationwide was the only expert wiling to suggest a quarter-point cut may be a result of the MPC deliberations, although she suggested there is only a 20 per cent this outcome will be reached.

Howard Archer of Global Insight, also polled by Adfero, said inflationary pressures have put a stop to any rate cuts for the coming months.

"With inflation likely to approach four per cent this summer … the Bank of England will tread extremely carefully on the interest rate path for the time being," he stated.

The MPC made rate cuts in December 2007, February and April, with last month's meeting resulting in a hold.

© Adfero Ltd

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