Bank of England unlikely to change UK base rates
This Thursday will see the next meeting of the MPC with nearly 100% of UK economists confident there will be no change in UK base rates. It would appear that the UK stock market is in a period of depression whereby the odd piece of sporadic good news appears to be discounted and all focus appears to be on negative news. So how can the Bank of England help with investor sentiment?
At this moment in time the Bank of England is unlikely to increase UK base rates which may well give the signal that the economy is struggling and there are tough times ahead. This comes just days after a number of MPC members stepped forward to air their fears about inflation although, with the exception of one member, nobody suggested that UK base rates were ready to move higher to offset this perceived risk in the short term.
Against this background of concern and confusion regarding the UK economy many analysts are now putting back the date at which they expect UK base rates to start to rise. After initially suggesting there may be some movement in the first quarter of 2011 the consensus is now that we will not see an increase in UK base rates until at least the second quarter of 2011 although in reality it could well be much later than this.
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