Interest rates only ‘paused’

Interest rates are expected to rise to at least 6%, according analysts who
said the decision to leave them unchanged last week at 5.75% was a ‘pause’
rather than a ‘peak’.

According to reports, the Bank
is expected to signal this week that interest rates will need to go up one more
time to 6% to be sure of meeting the official 2% inflation target.

A survey by research firm found that of the
analysts surveyed, 30% thought the inflation projection would be raised, 15%
believed it would be lowered and 55% that it would be unchanged.

On growth, the figures were virtually reversed, with 25% looking for a lower
growth forecast than May, 15% a higher one, and the remainder an unchanged

Further reading:

Economics: Home truths

E&Y finds consumer spending power in decline

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