THE BANK OF ENGLAND quashed lingering hopes of another interest rate cut yesterday as it signalled that it now expects its next move to be an increase in borrowing costs, reports the Times .
Unveiling a more dovish quarterly Inflation Report than some in the City had feared, Mervyn King, the Bank’s governor, said that its “benign central view” was again one of “steady growth with inflation close to the target over the forecast period”. However, after a recent spate of buoyant economic news, the Bank also sought to quell markets’ growing expectations of more aggressive rate rises. Instead, it pointed to any increase coming as late as next spring. The paper says the Bank’s analysis signalled that it will be in little hurry to act but that an eventual rate rise is on the cards...
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