Interest rates to be kept at 0.75pc amid slowing growth

LONDON: Bank of England policymakers are set to hold interest rates again on Thursday as economic growth slows sharply after a stock-building boost at the start of 2019.

The Bank’s nine-strong Monetary Policy Committee (MPC) is set to keep rates at 0.75 per cent once more in the noon decision, which comes after the latest official figures showed the economy shrank by a worse-than-feared 0.4 per cent in April.

Data on Wednesday showing inflation fell to the 2 per cent target in May from 2.1 per cent in April has also given the Bank some breathing space to keep rates unchanged. But MPC members have been banging the drum for the need to raise rates soon.

The Bank’s chief economist Andy Haldane said last weekend that the time was nearing “when a small rise in rates would be prudent to nip any inflationary risks in the bud”.

Ben Broadbent, deputy governor for monetary policy, and fellow MPC member Michael Saunders, have also recently told MPs on the Treasury Select Committee that financial markets are not pencilling in rate hikes soon enough. This follows similar comments from Bank governor Mark Carney at the May inflation report.