Will there be an interest rate change in march?

talksalot81

But that remains to make the false link between CPI and inflation. Look at money supply - the BofE is printing 14% or so new money every year...

Generali

True. Money supply is rising rapidly, that is undeniable.

Is all of the money supply growth above the rate of economic growth inflationary? If it is then the ONS are pulling a pretty impressive con trick stating inflation is 4% odd when it's really 11% or thereabouts.

Presumably the difference lies in not reflecting asset price inflation in the RPI figures. How does that sound?

fatpigeon_2

I vote for hold. The rise in August hasn't fed through into prices yet.

Optimist

LONDON (AFX) - A leading consultancy firm has warned investors not to get wrong-footed again when the Bank of England announces its interest rate decision at midday tomorrow.

KPMG has said the chances of a hike are rather higher than surveys suggest.

Only 5 of the 30 economists polled by AFX News expect the Monetary Policy Committee to raise its key repo rate a quarter-point from the current near-six-year high of 5.25 pct.

'February's Inflation Report was a clear statement of intent to raise rates again,' said Andrew Smith, KPMG's chief economist.

'Without an early increase, the MPC's forecast shows inflation running above target at the two-year time horizon,' he added.

Smith said the main argument against the MPC moving this month is the current bout of volatility in the financial markets.

However, he downplayed the likely impact of this on the MPC, arguing that this is a global phenomenon, which the MPC can do little about one way or the other.

'A rethink would be necessary if share prices fell far enough to damage confidence, wealth and spending, but we are by no means there yet,' he said.

'The MPC has surprised the markets twice in the last six months with rate rises -- March could make it a hat-trick,' he added.

The biggest surprise was in January, when the BoE lifted its key repo rate a quarter point to 5.25 pct. Only one economist was predicting a hike then.