BOE: Rates dilemma for Bank over manufacturing slump

verfasst von Sorrento, 05.04.2004, 23:06

-->An unexpectedly sharp drop in manufacturing output in February presented the Bank of England with an acute dilemma today, days before a decision on interest rates.

With the Bank's monetary policy committee (MPC) set to make its announcement on Thursday, the Office for National Statistics (ONS) reported that manufacturing output fell by 0.6% in February, to stand only 0.2% higher than a year earlier.

The data was a heavy blow to the manufacturing sector. Analysts had predicted an output rise of 0.4% and recent surveys from organisations such as the Confederation of British Industry had declared the seven-year slump in the sector to be over....

However, most economists surveyed by the Financial Times last week,, believe the MPC will raise rates. Of 40 analysts surveyed, 22 thought the committee would raise borrowing costs by a quarter-point to 4.25% on Thursday. The Bank has made two quarter-point rises since November, but members have been surprised at the resilience of the housing market and the buoyancy of consumer demand and high levels of borrowing.

<ul> ~ http://www.guardian.co.uk/business/story/0,3604,1186249,00.html</ul>

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• BOE: Rates dilemma for Bank over manufacturing slump - Sorrento, 05.04.2004, 23:06