The Bank of England is expected to set the stage for further stimulus measures to boost the UK economy on Thursday, amid rising tensions over Brexit and rising coronavirus infections.
But economists predict the Bank’s monetary policy committee won’t take any action now as they wait to see if earlier more gloomy predictions for the latter half of the year materialise.
Since the MPC last met in August, the summer’s recovery in economic activity has proved slightly stronger than the BoE’s forecasts suggested, inflation has been higher than the central bank projected and unemployment has so far risen less than feared.
Against that backdrop, the consensus view among analysts is that the MPC will leave interest rates on hold at 0.1 per cent and make no changes to the pace or size of its asset purchase programme, which is currently set to run until the end of the year.
“We expect the MPC to play for time this month and avoid closing off any of its options,” said Samuel Tombs, at the consultancy Pantheon Macroeconomics, arguing that policymakers would be unwilling to tie their hands until they…