A Little Time

Why the BoE shouldn't cut rates - at www.moneyweek.com - the best of the international financial media

There are two main concerns for the Bank of England with regard to the near term path for the UK economy: the strength of global indicators and the risk that UK consumption weakness gets worse over the summer. We expect reassurance from both quarters in the coming weeks, encouraging the MPC to delay cutting interest rates until Q4.

There was a raft of data released last week, but in our view the case remains unproven on the UK consumer. Mortgage borrowing, and other indicators of consumer credit, expanded again in May providing further evidence of stabilization in the housing market.

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