Expectation That Interest Rates Will Stay Low This Week

The view of most economists is that interest rates will stay at the same level when the MPC meet Thursday of this week.

The MPC has many issues surrounding the UK economy but the main one is the decline in consumer spending following the recent collapse of retailers such as Jane Norman and Habitat, while other stores such as Carpetright and Thorntons have announced store closures.

Now, there is even talk of more QE due to economic data showing weakness.  There has been renewed talk about the economy needing to be boosted by a second round of quantitative easing.

Chief Economist at IHS Global Insight, Howard Archer said: ‘We now expect the Bank to hold off from raising interest rates until the second quarter of 2012.

'We suspect that most MPC members will maintain the view for many more months to come that higher rates are an extra handicap that the fragile economy could well do without.’