The Bank of England's rate-setting committee will meet this week but an interest rate hike is not on the cards

Josh Jacobs
The Square Mile - London's Financial District
The Bank of England's monetary policy committee will meet on Thursday (Source: Getty)

The Bank of England’s rate-setting monetary policy committee (MPC) will meet on Thursday to discuss whether to increase interest rates.

Analysts expect the MPC to keep its current rate of 0.25 per cent unchanged.

Asset management firm Investec predicts that two members of the nine-person committee, Ian McCafferty and Michael Saunders, will vote to hike the rate to 0.5 per cent, but that the overall vote will be against any changes.

Read more: Bank of England's Michael Saunders: An interest rate rise would be helpful

Last month, Saunders argued that the UK’s unemployment rate – currently at a 42-year low of 4.5 per cent – a fall in inflation and a minor, yet unexpected, upturn in GDP growth meant that the bank can step away from stimulating the economy with low interest rates.

However, Bank of England gover­nor Mark Carney is less sup­port­ive of an immediate rise. In a speech at Mansion House in June, he said that the economy was not yet ready and that when a rise did come, it would have to be both modest and gradual.

“Now is not yet the time to begin that adjustment,” he said, citing “anaemic wage growth”, and “mixed signals on consumer spending and business investment”.

Read more: Is it likely the Bank of England will raise interest rates before 2019?

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