Besley unlikely to muster a majority for a hike

Inflationary pressures continue to prevent the Monetary Policy Committee (MPC) from cutting interest rates in response to the deteriorating real economy. In fact, if interest rates change this month, they are more likely to go up than down. However, given the continued lack of secondround effects from the rise in headline inflation, we think that a hike is unlikely. Indeed, we still think that rates could fall before the end of the year.