Economists believe the Bank of England will hold on interest rates

On Wednesday inflation fell 3.4%, but economist are predicting that the Bank of England will hold on interest rates on Thursday.

The Monetary Policy Committee (MPC) will meet on Thursday and analysts from BNP Paribas believe it is unlikely they will vote to change the base rate from 5.25%.

Matthew Swannell, Dani Stoilova and Gerardo Martinez at BNP Paribas said, “We do not think that this morning’s data will move the needle for the BoE meeting.

“One area of the focus will be the vote split, with the largest uncertainty around whether hawk Jonathan Haskel changes his vote from a 25bp (base point) vote hike to a hold.

“By his own admission, his February vote for a hike was ‘finely balanced’, so it is difficult to call how he will vote.

“Our expectation is that despite the BoE’s core services inflation dropping in February – which it would seem Haskel attaches some weight to – he will need further evidence of its being on a downwards trajectory before adjusting his vote. We expect an unchanged vote split.”