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. "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. 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.
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.