ECONOMISTS’ VIEWS: WILL THE BANK OF ENGLAND HIKE INTEREST RATES THIS WEEK?
MICHAEL SAUNDERS | CITIGROUP
“On one side, we believe recent data and surveys do not invalidate the logic of the Bank’s February Inflation Report, which judged that a rate rise around mid-year would be consistent with returning inflation to target over time. On the other hand, we do not actually expect a hike at the May meeting as several MPC members, probably including the governor, seem very reluctant to hike.”
PHILIP SHAW | INVESTEC
“UK GDP growth was recorded at 0.5 per cent in the first quarter, only just reversing the snow-related 0.5 per cent contraction at the end of 2011. Although official estimates showing a 4.7 per cent decline in construction look suspiciously low, doubts surround the economic outlook. This helps reinforce our view that the MPC will not raise the Bank rate until August at the earliest.”
HOWARD ARCHER | IHS GLOBAL INSIGHT
“After his final meeting on the Bank’s monetary policy committee, arch hawk Andrew Sentance is likely to depart the scene without the interest rate hike he has been pushing hard for. In fact, we believe the odds now favour the Bank of England holding off from raising interest rates until November. We had previously expected interest rates to start rising in August.”