Bank of England base rate to stay on hold
www.moneynews.co.uk > General finance > Bank of England base rate to stay on hold
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Money News |
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Bank of England base rate to stay on hold
Mon 7th Mar 2005
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The Bank's Monetary Policy Committee is widely expected to maintain rates at 4.75 per cent for the seventh consecutive month.
However, many economists believe the committee will be forced to make a quarter point rise later this year, due to inflationary pressure from rising oil prices and wage increases.
Stephen Radley, chief economist at the Engineering Employers' Federation, said: "Clearly if the MPC see inflationary pressure building they should act. But we're keen not to see an early, unnecessary, rise in interest rates. It's a sensitive time for manufacturers at the moment."
Retailers warned that raising interest rates this week could seriously damage the sector.
Consumer confidence in the retail and leisure sectors has dipped and freezing weather has hit sales hard.
David Frost, British Chamber of Commerce director general, said: "There is no need for another interest rate rise now. It would have a very damaging effect." A Sunday Telegraph poll of top retail chains revealed that many have suffered a slowdown in sales.
"We're expecting rates to remain on hold this month and we think that's the right decision, although there are signs of tightness in the labour market," Doug Godden, the CBI's chief economic analyst, commented.
Related News : General finance |
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