Market participants anticipate three rate hikes over the next three years. The MPC said: "The recent weakness in data for the first quarter had been consistent with a temporary soft patch." It added that: "The conditions for steady growth had remained in place, the labour market had continued to be strong, and survey indicators had suggested that activity growth would pick up again in the second quarter." But the policy makers want to make sure this rebound does happen before taking the plunge. The minutes of the MPC's meeting said that, for the seven members who voted to hold rates, "there was value in seeing how the data unfolded over the coming months, to discern whether the softness in the first quarter might persist". "The costs of waiting for additional information were likely to be modest, given the need for only limited tightening over the forecast period [the next three years] to return inflation sustainably to the target," it added. Economists believe the next rate rise could come in three months' time. "If we see a sufficient recovery in economic data releases through the second quarter, the BoE would be content to get on with the job of normalising Bank rate again, with the next hike even as soon as August," said Victoria Clarke at Investec.
The Bank of England's monetary policy committee (MPC) voted seven to two in favour of holding interest rates this month, believing that a slump at the start of the year will quickly recover to allow the bank to raise interest rates to 0.75% later in the year. The bank forecasts unemployment to fall further, inflation to fall to its 2% target over the next two years, and growth of 1.7% in 2019 and 2020. However, it is expected that consumer spending could be hit by higher inflation, which would push up prices for goods such as food and fuel.