For most economists, the Bank of England’s move to a neutral stance presages an eventual increase in interest rates.
Almost two-thirds of analysts surveyed by Bloomberg see the Bank of England raising its benchmark from a record low as policy makers confront inflation that could exceed their 2 percent target as soon as the second quarter of next year. Consumer-price growth was probably 1.1 percent in November, the fastest in two years.
The BOE’s neutral stance is a consequence of the opposing tensions created by June’s Brexit vote. Governor Mark Carney and his colleagues are set to provide fresh insight into how they intend to balance supporting growth and controlling inflation — pushed up by the pound’s decline — on Thursday, when they publish their latest policy decision.