The Bank of England's Monetary Policy Committee has held interest rates at 5.5% in spite of widespread expectations of a cut.
The move comes in the wake of sharp rises in energy prices fuelling inflation fears on the one hand, while poor sales figures from the likes of Marks & Spencer point to a slowing economy. According to Ian Kernohan, economist at Royal London Asset Management the MPC’s inaction was not wholly unexpected, although the market would not have been surprised if they had cut rates. “I expect a cut next month and depending on how bad the news is over the next few weeks, this could be a 50bp move, as the MPC seeks to head off the risk of a recession. The February Inflation Report will provide a good...
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