We expect the Bank of England’s Monetary Policy Committee (MPC) to keep Bank Rate unchanged at 3.75% at next week’s meeting. Since December, labour market data have shown continued softening, but progress on inflation has not been sufficient to justify immediate policy easing, particularly as the hurdle for cuts rises as Bank Rate approaches a more neutral level. The MPC remains a divided committee. Three of the past four meetings have resulted in a 5-4 split, with Governor Bailey breaking the ties. In the December minutes, the Governor noted that he sees “scope for some additional policy easing” if there is ... (full story)