8 June 2006
Evidence is mounting that suggest that the next movement in the Bank of England's base rate of interest will be up, according to one of the UK's largest high street banks.
A chief economist for Lloyds TSB said that no change is expected in the rate during today's announcement from the Monetary Policy Committee (MPC) on the issue, but that a number of factors were now suggesting the next change would be to increase the interest rate.
Trevor Williams, chief economist for Lloyds TSB Financial Markets, said: "What is becoming clearer is that the next move will probably be up.
"No one is expecting the MPC to do anything other than hold rates again this month. And with consumer spending as weak as it is, coupled with rising unemployment and a strengthening pound, it's hard to imagine a move being made any time soon.
"Manufacturing and the housing market both give reasons to be cheery, but with this growth comes the risk of higher inflation, so it would make sense for the MPC to tighten the reins with a rate rise before the year is out."
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