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Weak growth forcing rethink

Bank of England expected to delay interest rate rise

Money - own picInterest rates are likely to remain on hold as the Bank of England is forced to ditch its planned quarter point rise this week.

Analysts say weak economic growth and falling inflation have prompted a shift in intentions among members of the Bank’s monetary policy committee.

A rise was seen as a done deal until recently and only a couple of weeks ago EY’s Item Club was predicting the nine-member rate-setting group to announce the first of four increases over the next two years.

However, the Bank’s governor, last week cautioned against an immediate rise.

Recent data has been a big factor, with a big decline in construction activity behind the slowing growth in the first quarter.

Purchasing managers’ figures for April were subdued for services, which includes banking to restaurants and property.



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