Paul Hunt, managing director of Phoebus Software, said: “The MPC does not need to tinker with the Bank Rate because the current level is entirely fit for purpose. There’s no need to lower rates further now as the fears of a double dip have receded so far but neither should we raise them in a knee-jerk reaction to stamp on inflation.”
Barry Naisbitt, chief economist at Santander UK, said the minutes for today’s meeting would be revealing.
“With inflation still well above its target, and expected to rise even further in the coming months after the VAT increase, it will be interesting to see if the members have changed their concerns about the economic risks,” he said.
Inflation measured by the consumer prices index was at or above 3% throughout 2010, consistently above the Bank’s inflation target of 2%.