It is expected that the Bank of England (BoE) could keep interest rates unchanged again this week and will remain at 5.25%.
James Smith, a developed markets economist at ING, believes that the monetary policy committee (MPC) meeting is likely to be highly predictable.
He said, โIt would only take one committee member to change their mind to tip the balance in favour of more tightening โ but weโre doubtful.โ
However, experts at Investec said the MPC could still decide to raise interest rates, adding, that โthe case for raising rates further now does look somewhat weaker to us than at the last meeting, for a number of other reasons.โ
Susannah Streeter, head of money and markets, Hargreaves Lansdown, said, โAs more homeowners are forced to take on big increases in monthly mortgage costs as their deals come to an end, the effect of financial fragility is likely to show up in more frugal spending patterns and more uncertainty about jobs moves and reticence when it comes to pay demands.
โAlready the economy is flatlining, with growth proving very elusive, showing that demand is being squeezed out.
โFresh weakness in the housing market, with prices continuing to fall, affects peopleโs perceptions of their wealth โ and with house moves on hold, it wonโt encourage spending on renovations and interior decor.
โIf wage growth and goods and services price increases keep heading down, itโll make policymakers more adverse to another hike.
โBut given the stop-start nature of the downwards march of inflation and its very stubborn tendencies, any cut still doesnโt look likely until the second half of next year, particularly with oil prices remaining elevated among geo-political tensions.โ
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