Economists expect interest rates to remain at 0.5%

Economists have predicted the MPC will leave the UK's base rate at 0.5% this week, despite mounting speculation it may slash it to 0.25%.

Amid signs the economy is weakening, and with fears of a wider slowdown building globally, the MPC is under pressure to provide an additional boost to the UK ahead of its latest announcement on Thursday. However, economists said they expected the base rate to be left on hold at its current record low, with the MPC relying solely on more QE to boost the economy. Simon Ward, chief economist at Henderson, said: "In case of a rate cut banks would need to make up for the interest losses in loans by raising rates elsewhere" "The main concern is that lower rates would squeeze banks profit...