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UK edging towards interest rate hike as hawks flex muscle

By John-Paul Ford Rojas

Published 03/08/2015

Mark Carney
Mark Carney

The Bank of England will announce its latest interest rate decision this week amid speculation that there will be a split vote among officials for the first time this year.

Rates are expected to remain at 0.5% for now, but recent remarks from bank officials have fuelled expectations that there could now be a hike before the end of 2015.

Economists had previously been expecting an increase in rates in the middle of 2016 but Bank governor Mark Carney said in a speech that a decision about a rise would "come into sharper relief around the turn of this year".

Latest projections will be closely scrutinised for clues about whether the Monetary Policy Committee may now be considering a rates hike this year.

The bank's last inflation report in May had seen it slash its growth forecast for this year from 2.9% to 2.5% after a weak first quarter.

But new figures showed gross domestic product had bounced back with expansion of 0.7% in the second quarter - though there remain concerns about manufacturing, with exports held back by the strength of the pound.

Belfast Telegraph

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