The Bank of England left interest rates unchanged at 4.5 percent on Thursday, but analysts are hotly debating when and what the central bank''s next move will be.
All 50 economists polled by Reuters last week had predicted the Monetary Policy Committee would do nothing this month after cutting rates for the first time in two years in August in a close 5-4 vote.
Economists said some MPC members are itching to cut rates next month but Governor Mervyn King, who opposed the August cut, is probably worried that inflation is already above the 2 percent target and set to rise further.
"There is still a battle royal going on between the hawks and the doves over easing," said David Brown, Chief European Economist at Bear Stearns.
He, like many other economists, argues that growth is falling short of the BoE''s August forecasts and the central bank will have to cut rates by another quarter percentage point to 4.25 percent as early as November.
Other analysts argue the worst is over for the economy and the central bank will raise rates early next year as the US Federal Reserve is now doing.
Comments
Comments are closed.