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Bank
Rate has sat at 0.5 percent for over seven years and the BoE -
which was once pegged as going to be the first major central
bank to tighten policy - will not act until early 2017, the poll
of 50 economists taken in the past few days found.
There was only a median 40 percent chance the Bank will have
raised rates by the end of this year, down from the 45 percent
in a March 8 poll.
"At this stage, a 2016 rate hike is wishful thinking given the
headwinds that currently face the UK economy," said Thomas
Bloomfield at 4CAST.
Britain's economy is expected to grow a relatively modest 0.5
percent per quarter from here through to the middle of next
year, and markets are jittery that any more evidence of a
slowdown in China would send shockwaves across the world.
As well as facing disappointing growth, the central bank is
having to set policy with inflation nowhere near its 2.0 percent
target. Prices rose just 0.3 percent in February on a year ago.
Therefore any hikes will be gradual and the initial 25 basis
point increase will be followed by matching moves in the second
and fourth quarters of next year. At the end of 2018, borrowing
costs will still only be 1.75 percent, unchanged from the
previous poll.
None of the 50 economists polled expect any move when the Bank's
Monetary Policy Committee makes its latest policy announcement
on April 14.
(Reporting by Jonathan Cable; Polling by Aara Ramesh and Vartika
Sahu; Editing by Tom Heneghan)
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