Rate hikes still a distant prospect

With inflation falling faster and slack in the labour market being used up more slowly than the MPC expected in February’s Inflation Report, the decision to leave Bank Rate on hold at this month’s meeting should be straightforward. This may be fortuitous, since the MPC will only meet on Wednesday, rather than over the usual two days! (The decision will still be announced at 12.00BST on Thursday.) That said, recent speeches highlighting divisions as well as the announcement of upcoming changes to the MPC’s composition have arguably increased uncertainty surrounding the medium-term outlook for interest rates.