The Bank of England is widely expected to leave interest rates on hold when it meets later today.
Better-than-expected economic growth data in the third quarter – seen as a sign of resilience following the UK’s vote to quit the European Union – could mean Bank of England governor Mark Carney paints a rosier picture of the UK’s economic outlook after warnings of a UK post-Brexit recession failed to materialise.
The Bank cut official interest rates to a new record low of 0.25 per cent from 0.5 per cent in August and signalled it could move closer to negative territory as the economic fallout from the vote to leave the EU becomes clearer.
However, last week’s GDP reading – showing an expectation-beating 0.5 per cent growth in the last quarter – prompted economists to dial back forecasts for a second rate cut in November.
City A.M.’s shadow Monetary Policy Committee – usually more hawkish than the Bank of England – has voted seven against two to leave rates on hold, though the shadow MPC’s two dissenters went different ways.