The markets had "a brief summer flirtation with the idea that the [Bank of England] might tighten monetary policy sooner than expected", says Peter Thal Larsen on BreakingViews.com. But it seems to be over now. In June, the Monetary Policy Committee voted by five to three to keep interest rates on hold, an unexpectedly narrow majority. At last week's meeting, though, the vote was six to two.
Inflation fell back in June to 2.6% from May's 2.9%. And the latest Inflation Report by the Bank was "more gloomy and dovish", says Patrick Hosking in The Times. It cited uncertainty over the post-Brexit landscape as reason to lower its growth forecasts. It thinks GDP will expand by 1.7% this year, down from a previous estimate of 1.9%. There seems little prospect of interest rates rising from their emergency levels of 0.25% anytime soon. The report assumes savers will have to wait until the summer of 2018 before dearer money arrives, by which time they will have suffered almost a full decade of near-zero rates.
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