Poll points to rate freeze

Posted: 02 May 2008 11:01:09 GMT

A new poll suggests that the Bank of England's Monetary Policy Committee (MPC) will wait until June before cutting the base rate of interest.

A new poll suggests that the Bank of England's Monetary Policy Committee (MPC) will wait until June before cutting the base rate of interest.

Nine of the UK's major financial institutions were questioned on May's rate decision, with all of them forecasting no change.

However, there is a growing belief that a reduction will be announced in June.

"Over the course of the last month or so the MPC is going to be more concerned about inflation coming from particularly the fall in Sterling and the UK events in the real economy," said Simon Hayes, UK economist at Barclays Capital.

"We haven't had such bad news on economic activity to justify a cut this month. But I do think they will cut next month or certainly within the next two months though," he continued.

Nationwide said that there is a 30 per cent chance that rates will be cut this month.

The MPC is due to announce its decision on May 8th.

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