Fears over potential rate rise
Pressure is piling on the Bank of England to delay a rate hike.
Experts reckon the Bank’s monetary policy committee could double the base rate to 0.5% as early as next month.
But a flurry of data in recent days has raised concerns about the strength of the economy.
The service sector – which makes up the bulk of the economy – picked up last month, a survey from number crunchers Markit and the Chartered Institute of Procurement and Supply found. But growth has been slow over the past three months. It comes after the construction sector went into recession last month and manufacturing output dipped. Howard Archer, chief economic adviser to EY ITEM Club, said the service sector data gave “conflicting influences” for the Bank of England to consider. And leading credit ratings agency S&P said it was hard to justify a rate rise. It reckons hints by Bank Governor Mark Carney about an increase in the coming months was “aimed at propping up sterling to reduce imported inflation pressures”.