Mr Bailey is poised to reveal the Bank of England’s quarterly Monetary Policy Report which will detail thorough economic analysis and inflation projections. The inflation projections are the figures which the Bank’s Monetary Policy Committee (MPC) will use to inform its decision on interest rates. The contents of today’s report will also outline an assessment of the prospects for UK GDP growth, inflation, and unemployment.
There has been widespread, and often differing, speculation about what today’s announcement will bring.
Financial markets show that more than six in 10 investors are anticipating a hike in the cost of borrowing while a majority of City economists take the opposite view, telling a Reuters survey they expect rates will remain at historic lows.
Mr Bailey’s comment that the bank “will have to act and must do so if we see a risk, particularly to medium-term inflation” caught the eye of many investment funds seeking to hedge against rates going up at the last meeting.
In a disappointing decision for savers, the MPC voted unanimously to maintain the Bank Rate at 0.1 percent at its last meeting in September.
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