Simon Rubinsohn, chief economist at stockbroker Gerrard, says the Bank of England is unlikely to raise rates in the next two months.
Instead, it will look to the latest retail lending figures as evidence its rates increases are biting sufficiently to avoid further immediate increases.
The Bank’s latest figures show a decrease in total and secured lending, and in the number of mortgages approved.
Remortgaging continues to be strong, perhaps because borrowers are looking to lock in fixed mortgage rates in light of the threat of further rates increases, Rubinsohn says.
However, there is little evidence of a strong rebound in retail sales, which have experienced a sharp drop-off over the past month, Rubinsohn adds.
Despite statements that poor weather may have affected sales, the overall trend of affected activity in the housing market is likely to be read by the Bank that its efforts are working, and it “is likely to sit on its hands for at least the next two meetings”.IFAonline
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