Reuters
[Source: Reuters]
The Bank of England looks on course to keep interest rates unchanged at 3.75% later on Thursday as it assesses what a tentative truce in the Iran war means for inflation.
Even before the outlines of a deal emerged late last week, Governor Andrew Bailey said the BoE had time to wait and was in a different position than the European Central Bank, which last week raised interest rates for the first time since 2023.
However, analysts will be closely watching for dissent on the nine-member Monetary Policy Committee, where external member Megan Greene is seen as the likeliest to join Chief Economist Huw Pill in voting for a quarter-point rate rise.
Action sooner rather than later — maybe within weeks — was needed to bolster public confidence that the BoE was one step ahead of price rises, Greene said earlier this month, shortly before BoE data showed household inflation expectations had risen to a record high.
“Even if everybody was convinced that … oil continues to fall from here, I think the ones that are concerned about second-round (inflation) effects probably think those are already making their way into the system and want to jump ahead of those and kill them off,” said Gordon Shannon, a partner at TwentyFour Asset Management.
