Economists are split on the Bank of England’s interest rate decision today.
Out of 56 estimates collated by Bloomberg, only five economists expect rates to be held, meaning the consensus is heavily for a hike — but most of those guesses predate yesterday’s unexpectedly low inflation reading.
A flurry of firms changed their predictions following that data, with almost all those who provided updated estimates now expecting a hold.
The dovish camp includes Goldman Sachs, where economists say yesterday’s inflation data — which “surprised meaningfully to the downside” — should prompt an end to the tightening cycle.
Deutsche Bank’s Sanjay Raja, who has previously expected a rise in rates, said “the case for a pause is [now] slightly stronger”, but added “either outcome won’t surprise us”.
Citi’s Benjamin Nabarro said today’s meeting is a “genuinely tight 50/50 call”.
Investec’s Ellie Henderson still expects an increase, pointing to year-on-year private sector pay growth at 8.1 per cent over the past three months.
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