Members of the Monetary Policy Committee decided this morning to keep interest rates at the historically low 0.5 per cent, while quantitative easing was also kept steady at £375bn.
David Tinsley, UK economist at BNP Paribas, said that as no additional note was released with the Bank’s decision, focus has now turned to next month’s inflation report.
“In terms of those projections, we would envisage an upward revision to the Bank’s growth forecasts in the near term,” he said.
He added that the unemployment rate may fall to the Bank’s 7 per cent target quicker than forecast, perhaps by the end of next year.
The Bank’s policy of forward guidance indicates it will consider raising interest rates when unemployment falls to this level, and “the market will be continuing to look for the first hike to come from the Bank earlier than it itself is forecasting”.
The inflation report will be released on November 13, while minutes of the MPC meeting will be released on November 20.