10 August 2006
Governor of the Bank of England, Mervyn King, has moved to dampen suggestions that there will be a second rise in interest rates in the near future.
The bank's latest report on inflation levels had led some analysts to fear that there could be a further rise in interest rates, after the report predicted that levels of inflation in the UK had not yet peaked.
However, Mr King has commented that the outlook for inflation in the near-term is "more uncertain than in May", which means that it cannot be said with any conviction that the bank's monetary policy committee (MPC) will look to rise rates in the coming months.
Looking further ahead, Mr King pointed out: "After the initial near term rise, the central projection is for inflation to ease back towards the target."
That prediction suggests a rise in interest rates would not be necessary on the bank's current projections.
The governor refused to give any insight into the MPC's thinking for the future, adding: "We have very clearly set out our approach. I think that people who think you should drop hints are barking up the wrong tree. We don't agree with that."
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