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Bank of England meeting could discuss cutting interest rates

The Bank of England’s interest rate setters meet against a gloomy economic backdrop this week that could prompt at least one policymaker to push for a cut in borrowing costs to shore up stalling growth.

The nine-strong monetary policy committee (MPC) is not expected to make any changes to the record low base rate of 0.5% on Thursday the 12th of May. But investors will be scouring minutes of the latest meeting and the Bank’s new forecasts for the economy released at the same time for clues as to whether the next move will be up or down.

Markets are not pricing in any policy move this year and the Bank’s policymakers have also signalled that rates are going nowhere for now, given the upcoming referendum on EU membership is clouding the economic outlook. At the same time, there has been a clear message from governor Mark Carney that when there is a change in borrowing costs it is more likely to be up than down.

However, a recent run of bad news on the economy may have chipped away at Carney and other policymakers’ certainty on the path for interest rates, say experts. The committee could discuss cuts at this meeting even if most members are not close to voting for such a move.

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