The Bank of England’s interest rate decision may be about to get interesting again, after years of predictability.
With fears Greece could crash out of the euro zone on the back burner for now, interest rate rises are becoming the next big bet for traders.
The central bank’s Monetary Policy Committee (MPC), which makes interest rate decisions and has kept its base rate at 0.5 percent for more than six years, may start showing signs of a more pro-rises stance at next Thursday’s meeting.
Many economists are now expecting a 7-2 split in the committee, rather than the unanimous 9-0 in favor of maintaining rates at 0.5 percent last time around.
Martin Weale and Ian McCafferty, widely seen as the committee’s two most hawkish members, are viewed as the two most likely to want to raise rates. There are a couple of other members who are outside bets to take the leap.
David Miles, for whom the August meeting will be his last on the MPC, might also surprise with a vote to raise rates, according to Samuel Tombs, senior U.K. economist at Capital Economics. He thinks the bank will probably keep rates on hold until the second quarter of 2016.