Too early for Bank to cut interest rates on Thursday, economists predict

The central bank’s Monetary Policy Committee is widely expected to hold interest rates at 5.25.

The Bank of England looks set to keep interest rates unchanged for longer as the UK’s policymakers hold out for firmer evidence that inflation is under control.

Higher interest rates are used as a tool to control inflation, which has fallen sharply in recent months. Laith Khalaf, head of investment analysis at AJ Bell, said: “It is almost certainly too early for the Bank of England to pull the trigger on a rate cut right now, especially against the backdrop of a more hawkish US central bank.”

Mr Khalaf said the Bank is also likely to be influenced by the European Central Bank, which is widely expected to cut rates in early June. “The closer the inflation dial gets to 2%, the greater the pressure on the Bank of England to take its foot off the brake and cut rates. Philip Shaw, chief economist at Investec, said: “This broad direction illustrates that collectively the committee is moving gradually towards a rate cut.

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