Bank of England expected to leave interest rates on hold; UK unemployment falls – business live

Introduction: Bank of England interest rate decision today Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. UK households and businesses could be spared a rise in borrowing costs today, as the British economy creaks under the strain from the Iran war. The Bank of England is widely expected to leave interest rates unchanged at 3.75% at noon today, after its latest monetary policy committee meeting. Policymakers at the BoE will try to balance the challenge of containing imported inflation from the Middle East conflict, while avoiding intensifying the squeeze on firms and consumers who have been hit by the rise in energy costs. With the economy shrinking slightly in April, and inflation lower than forecast in May ( we learned yesterday ), a hike in borrowing costs appears unnecessary. The City of London money markets indicate there’s a 98% chance that interest rates are left on hold, and just a 2% chance of a rise. Tomasz Wieladek , chief European macro economist at investment management firm T. Rowe Price, argues that the Bank may not need to tighten monetary policy at all in the coming months. double quotation mark Monetary policy in the UK appears to be finally working. A prolonged period of restrictive monetary policy has, to a degree, weakened inflation dynamics. …