3 May 2006
The Bank of England will most likely keep interest rates on hold when its rate-setting committee meets tomorrow, analysts predict.
In a poll undertaken by Reuters, Bloomberg and AFX, 119 of the 120 economists questioned predicted that the monetary policy committee would freeze rates at 4.5% like it has done for the past eight months.
In addition, Nationwide predicts that there is a 90% chance that the rates will remain as they are.
This comes as the company's consumer index fell by two points last month – 14 points down on a year ago.
Nationwide says that this pessimistic outlook is due to the fact that consumers are worried about the current economic situation.
Stuart Bernau, executive director of Nationwide, commented: "It is hardly surprising that consumer confidence remains subdued, despite the fact that there are some positive economic indicators."
He added: "Rising utility prices and the prospect of petrol hitting £1 a litre will also have an impact. These factors will affect willingness to spend and will threaten the return of consumer spending which underpins the Bank's upbeat forecast."
The meeting of the monetary policy committee will take place tomorrow. uSwitch.com's loans comparison service provides an impartial search of the loans market to find the best loan for you
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