“The MPC will want to see more evidence of secondary effects caused by the Middle East conflict, while there are also concerns for the wider economy and the labour market, which have greater weight among the hawks on the Committee.”
Craig Head (pictured top, second from left), director at Mortgage Required, said lender behaviour pointed strongly towards a hold. “The current trend of rates with all major lenders has been downwards, with most major lenders trimming their rates in the last week,” he said — typically a signal that those who closely monitor monetary policy expect Bank Rate to stay put.
Gerard Boon (pictured top, far right), managing director at Boon Brokers, pointed to UK GDP data as the key constraint on MPC action. “Given the latest news regarding the UK’s GDP contraction last month, inflation is expected to fall if these contractions continue,” he said.
“If they were to increase their Base Rate, as some economists anticipate, it could create a deflationary environment in the UK, which may result in an even quicker contraction to the economy as buyers hold back from spending.”
Neil Mulhearn (pictured top, second from right), head of sales at Echo Finance, offered a more cautious view, saying a hike this month was possible. “The European Central Bank have just increased their rates, and the Bank of England may be forced to follow suit,” he said.