Belfast Telegraph

Bank of England 'to ignore inflation fears and keep rates low'

By Staff Reporter

The Bank of England is expected to leave interest rates unchanged later today despite mounting fears over a renewed surge in inflation.

Economists predict the Bank's Monetary Policy Committee (MPC) will vote 7-2 to keep rates at 0.25% as dovish members continue to outnumber those calling for a hike, even as consumer prices push further past the bank's 2% inflation target.

Official figures showed Consumer Prices Index inflation (CPI) rose by more than expected to 2.9% last month as the effects of the Brexit-hit pound continued to feed through.

It ended a brief respite seen in June and July, when CPI eased back to 2.6% and now matches levels seen in May this year and June 2013.

Experts believe the MPC will continue to hold off from raising rates to cool rising inflation amid uncertainty caused by Brexit and subdued growth, which stood at 0.3% in the second quarter.

This week, the governor of the Bank of England, Mark Carney, said the 2007 banking crisis left people in the UK an average of £20,000 worse off. He said the financial system was now "safer, simpler and fairer".

Belfast Telegraph

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