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Rates uncertainty as firms cut jobs

Tuesday April 5th 2011

Bank of England policymakers are expected to hold fire on interest rates this week and put back any increase until late summer as a consumer spending squeeze hits Britain.

Experts predict a deepening consumer spending slump will see rate setters remain in 'wait and see' mode until August at the earliest.

The market has widely expected the Bank's nine-strong Monetary Policy Committee (MPC) to hike rates in May to rein in soaring inflation.

But gathering gloom on the consumer outlook is seen posing an even bigger threat to economic growth, according to economists.

Dire news from the retail sector last week confirmed plunging consumer confidence as government austerity measures kick in.

Wine retailer Oddbins became the latest well-known name to succumb to tough trading, announcing it was calling in administrators after failing to secure a rescue deal.

Copyright © Press Association 2011

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