Sluggish recovery eases pressure to hike

March’s fall in inflation and a run of weak news on the economic recovery have left an interest rate rise at this month’s Monetary Policy Committee meeting looking relatively unlikely. With inflation likely to rise further over the coming months, a rate rise later this year nonetheless remains a significant threat. But if the recovery struggles to regain momentum, as we expect, the MPC should hold back from hiking at all this year - or even next.