LONDON - figures showing a slowdown in the construction sector and the House price price expectations strengthened market that the Bank of England will keep interest rates of reference to the registration of 0.5 per cent for a few months more.
On Wednesday, downbeat economic news came as charging Bank's monetary policy Committee began its monthly two-day policy meeting, analysts said the figures would do little to swell the ranks of the people on the Panel of nine members voting for higher costs of borrowing.
As well as the Central Bank itself reported a decrease of 60% mortgage in March, the national society of construction said real estate prices resumed their downward trend in April and a CIPS/Markit construction growth slowed significantly in the same month survey.
Analysts say the signs of stagnant economic growth, combined with the slowdown in inflation, killed any prospect of a rise in rates when the Bank announced its decision Thursday.
"In fact, we believe that the odds favor now the Bank of England, holding off the coast to increase the rate of interest until November," said economist, IHS Global Insight Howard Archer, who had previously pressed a place in the month of August.
The Central Bank held interest rates at 0.5% since March 2009. Rates were slashed at this level in the wake of the global financial crisis. The Bank also undertook a program to purchase assets 200 billion pounds ($330 billion) - called quantitative easing - after execution of room on the interest rate front.
Economists had begun to factor rises in their forecasts for the next months as inflation have increased over target, believing that the Bank would need to act to contain spending despite ongoing sluggish internal growth.
Objective of the Bank is to hold the annual increase in the price index at 2%, a percentage point, a goal that has been exceeded for 15 straight months.
However, inflation of consumer prices unexpectedly withdrew at 4% in March of 4.4% in February.
Gross domestic product, meanwhile, rose 0.5 per cent in the first quarter of this year. But following a contract by 0.5% in the last quarter of last year, leaving the largely unchanged GDP within six months.
"Levels of low activity in the housing market, cords of the province of tighter Government, rising prices of inputs of fuel and materials, and in some cases poor cash flow, are clearly a concern"said David Noble, Chief Executive at the Chartered Institute of Purchasing and Supply.
Which leaves the economists expect the majority of the monetary policy Committee to vote to hold stable rates, despite a three-way split in the group in recent months.
It's the month last for arch-hawk Committee Andrew Sentance to win the favour of an increase in the rates. Sentance has in recent months have voted to increase the rate of 1% of the inflation of counter. Two other members of the Committee, Spencer Dale and Martin Weale, supported a hike to 0.75% in the last two months.
Yet, another Member, Adam Posen, voted instead to another 50 billion pump (83 billion dollars) in the program easing quantitative of the Bank to boost economic growth.
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