Interest rates Look Set to Stay Low (for now).

Due to the economies lacklustre growth in the last quarter, it seems likely that the MPC will keep interest rates low until after the summer; the risk of a 1970's style stagflation is still real but the BoE is adament that the economy must grow first.

Economist at JP Morgan, Allan Monks said: 'The MPC remains understandably cautious about growth, given the drags in place from falling real incomes, fiscal tightening and weakening household confidence. We therefore see a rate increase at this week's meeting as unlikely.'

Chief economist at IHS Global Insight, Howard Archer said 'This reflects our belief that growth will be muted during much of 2011 and that a soft labour market will prevent higher inflation expectations feeding through to lift wage growth significantly.'