BoE seen holding as rate hike timing debate continues

Investing.com - The Bank of England is expected to stand pat on policy Thursday as the debate on the merits of a rate hike sooner rather than later continues.The bank rate currently stands at a record low of 0.25%, with its quantitative easing asset purchase program at £435 billion.Economic growth slowed in the second quarter to 1.7% while consumer price inflation eased to 2.6% in June but remained above the bank’s target of 2%.That eased some of the pressure on the U.K. central bank for an early rate hike.The focus will be on the bank’s latest inflation report and remarks by BoE governor Mark Carney.Investors will also look to a potential split in the vote to maintain policy. Three Monetary Policy Committee members voted for a hike in the bank’s June meeting.Since then noted hawk Kristin Forbes has been replaced by London School of Economics professor Silvana Tenreyro.Tenreyro is considered to lean on the dovish side.The National Institute of Economic and Social Research Wednesday brought forward its prediction for the first rate hike in nearly 11 years.It now sees a hike in the first quarter of next year as opposed to an earlier forecast of a hike in the second quarter of 2019 after Britain’s expected exit from the European Union.It maintained its forecasts for GDP growth of 1.7% this year, rising to 1.9% the following year. “2017 will mark the trough for GDP growth. Thereafter, we envisage a modest recovery that takes economic growth to a level that is close to potential,” the research group said.The pound was trading Wednesday at above the $1.32 mark against the dollar. close to levels seen since September 2016.