BoE to keep interest rates on hold in March, likely to raise in Q4 2016

The Bank of England is likely to unanimously vote to keep interest rates on hold during the monetary policy meeting in March. The MPC might have had relief from the recent short-squeeze in energy and commodities, but inflationary pressures elsewhere are still lacking. Moreover, against the backdrop of a wider slowdown in the economy, it will not be sufficient for McCafferty to vote for an interest rate rise.

Meanwhile, the outlook for wage growth remains uncertain and risk continues to be on the downside as the structural factors are expected to still be in play. With worries of Brexit beginning to feed through to businesses, the environment becomes less favorable to tightening. Currently, the central bank is expected to tighten policy in Q4 2016.