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| Version 0 | Version 1 |
|---|---|
| UK rates tipped to stay at 5.25% | UK rates tipped to stay at 5.25% |
| (40 minutes later) | |
| The Bank of England's Monetary Policy Committee is expected to keep interest rates at 5.25%. | The Bank of England's Monetary Policy Committee is expected to keep interest rates at 5.25%. |
| But if rates do not go up on Thursday, they could rise soon after - possibly as early as May, when inflation figures are released, say economists. | But if rates do not go up on Thursday, they could rise soon after - possibly as early as May, when inflation figures are released, say economists. |
| Data showing March retail sales rose at their fastest rate in more than two years could boost the chance of a rise. | Data showing March retail sales rose at their fastest rate in more than two years could boost the chance of a rise. |
| The UK has raised rates by a quarter point three times since last summer: in August, November and January. | The UK has raised rates by a quarter point three times since last summer: in August, November and January. |
| 'Uncertainty' | 'Uncertainty' |
| "Although the risk of an early move this Thursday is serious, the Bank of England is a bit more likely to wait until May," said Holger Schmieding, an economist at Bank of America. | "Although the risk of an early move this Thursday is serious, the Bank of England is a bit more likely to wait until May," said Holger Schmieding, an economist at Bank of America. |
| This view was echoed by Philip Shaw, chief economist at Investec Securities: "We are still forecasting a 25 basis point increase to 5.5% in May". | This view was echoed by Philip Shaw, chief economist at Investec Securities: "We are still forecasting a 25 basis point increase to 5.5% in May". |
| "Our central view remains that rates will come down gently in 2008," he added. | "Our central view remains that rates will come down gently in 2008," he added. |
| In March, members of the Monetary Policy Committee (MCP) voted 8 to1 to keep rates on hold, minutes show. | In March, members of the Monetary Policy Committee (MCP) voted 8 to1 to keep rates on hold, minutes show. |
| Only David Blanchflower voted in favour of a rate cut. | Only David Blanchflower voted in favour of a rate cut. |
| The last vote came against a backdrop of wildly fluctuating stockmarkets worldwide, which raised concerns over the possibility of wider economic contraction. | The last vote came against a backdrop of wildly fluctuating stockmarkets worldwide, which raised concerns over the possibility of wider economic contraction. |
| While the markets now appear far less volatile, Mervyn King, the Bank of England's governor, has suggested such instability could occur again, as worries over the US economy remain. | |
| The drop in inflation in January - to 2.7% from 3% - was seen as a key factor in keeping rates unchanged. | The drop in inflation in January - to 2.7% from 3% - was seen as a key factor in keeping rates unchanged. |
| However, the following month saw inflation hit 2.8%, a figure above target. | However, the following month saw inflation hit 2.8%, a figure above target. |
| Mr Shaw said: "The rule of thumb when uncertainty reigns tends to be that the MPC places greater reliance on its inflation report analysis. This implies no change this time but a hike next month." | Mr Shaw said: "The rule of thumb when uncertainty reigns tends to be that the MPC places greater reliance on its inflation report analysis. This implies no change this time but a hike next month." |
| As well as strong retail in March, other figures for the month showed annual house price inflation across the UK hit nearly 10%, according to the Nationwide Building Society. |