The first monetary policy meeting of the BOE for this year is scheduled to take place later this week, and there are rising expectations that the central bank could announce a rate cut on the back of recent weak economic data releases. However, here are some reasons why the Bank of England could keep rates steady this time around.
Recent economic data releases have been more on the disappointing side and have revealed a weaker state of the British economy. Although, there has been a marked improvement in confidence and expectations among both businesses and consumers, indicating that things could be looking up for the economy, ever since the Tories won the general elections in December.
The final details of Brexit may still be up in the air, but at least Britain looks set to begin the process finally, after numerous delays. Meanwhile, the most recent data release has been a silver lining – the PMI not only reveals expansion in the services sector in the UK, but also an improvement in business confidence.
Another recent survey by the CBI also reveals an uptick in business confidence among British manufacturers. In addition, employment is also showing signs of growth with businesses looking to hire more permanent staff in the coming months – a sign that points to a more optimistic outlook.