Lloyds TSB comments in advance of base rate decision

Commenting in advance of this week’s Bank of England Monetary Policy Committee (MPC) base rate decision, Trevor Williams, chief economist, Lloyds TSB Corporate Markets said: “Despite the ongoing turmoil in world markets, we’re almost certain to see the Bank of England hold rates this week.

“The housing market has proved remarkably resilient to the interest rate increases seen so far and is only just starting to slow down. Moreover, the economy remains pretty robust, with growth and retail sales figures both still strong, meaning a rate cut is almost certainly ruled out.

“However, with inflation comfortably under its two per cent target, wage inflation rising slowly - at 3.5 per cent year on year - and continuing turbulence in the credit markets, it is equally certain there will not be a rise.”