Bank of England set to hold interest rates as it awaits more signs on inflation

The Bank of England is set to keep interest rates unchanged this week as it hunts for clearer signs that pay growth and services inflation are cooling sufficiently to permit a cut in the cost of borrowing. Photograph: Henry Nicholls/AFPThe Bank of England is set to keep interest rates unchanged this week as it hunts for clearer signs that pay growth and services inflation are cooling sufficiently to permit a cut in the cost of borrowing.

Official data this month pointed to softer conditions in the UK labour market, as slightly slower wage growth combined with a fall in job vacancies, stalling growth in the number of payrolled employees, and an increase in the number of claimants for jobless benefits. However, a quarter of the 63 deals examined were worth 6 per cent or more. A key factor in April is the upcoming 9.8 per cent increase in the national living wage, a boost that will also have knock-on effects on the pay of some employees who earn somewhat more than the statutory floor.

While two policymakers, Catherine Mann and Jonathan Haskel, opted for an increase in rates to 5.5 per cent, fellow external member Swati Dhingra called for an immediate cut. The majority voted for no change.

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