Uncertainty makes February rate rise unlikely

The minutes of the last Monetary Policy Committee (MPC) meeting suggested that the Committee was edging closer towards a near-term rate hike. But the sharp slowdown in the economic recovery at the end of last year is likely to discourage any members tempted to side with the Committee’s two hawks. Of course, if the recovery quickly regains momentum, a near-term rate rise will come back on the agenda. But we think it more likely that the recovery remains weak and rates stay exceptionally low.