Economy’s resilience will probably stay the MPC’s hand

The resilience of the economy in Q3, combined with a stronger inflation outlook, will probably be enough to persuade a majority of MPC members to leave rates unchanged at next week’s meeting. What’s more, while we would not rule out the possibility of another rate cut entirely, we think that growth will continue to surprise the MPC on the upside over the coming quarters and that the cushion from the lower exchange rate and easing of the fiscal squeeze should mean that further monetary policy easing is no longer warranted.