Live Bank of England poised to keep rates on hold amid inflation fears
The Bank of England is widely expected to keep interest rates on hold later today amid global uncertainty and surging food and oil prices.
Most economists think the majority of the members of the Monetary Policy Committee (MPC), which sets borrowing costs, will vote to keep the Bank Rate at 4.25pc.
The MPC has voted to cut rates at every other meeting since it started easing borrowing costs last August, from a peak of 5.25pc.
However, official figures on Wednesday showed inflation remained persistent at 3.4pc in May, which is well above the Bank of England's 2pc target.
Food prices surged during the month at the fastest pace since February last year, the data showed, just as the conflict in the Middle East triggered a spike in the price of oil.
Meanwhile, policymakers must also consider the potential hit to global growth from Donald Trump's tariff regime and the risks it poses to inflation.
Monica George Michail, associate economist for the National Institute of Economic and Social Research (Niesr) said the institute was forecasting inflation to remain above 3pc for the rest of the year amid 'persistent wage growth and the inflationary effects from higher Government spending'.
'Additionally, the current tensions in the Middle East are causing greater economic uncertainty,' she said.
'We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year'.
Sandra Horsfield, an economist for Investec, added: 'The risk to energy prices has clearly intensified and moved up the agenda given developments in the Middle East.
'It seems unlikely the MPC will want to change policy rates this week.'
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