Bank of England

Speculation the Bank of England will lower its economic growth forecasts has caused the pound to slump in afternoon trading.

Mervyn King's argument for keeping interest rates at a record low 0.5% has received a boost from the latest construction data showing economic growth is not yet strong enough.

The Bank of England will not hike interest rates until 2013 as the economic recovery remains "pretty weak," former treasury adviser Roger Bootle has said, a day after Bank governor Mervyn King dismissed an early rise due to the "sheer volume of debt in...

COALITION ONE YEAR ON

Chancellor George Osborne said he believes the UK economy is "roughly in the right place" ahead of the publication of Q1 GDP figures this morning, as economists predict growth will come in below forecasts.

The Monetary Policy Committee (MPC) was again divided six-three against a rate rise earlier this month, minutes from the April meeting reveal.

The Monetary Policy Committee should have started raising the base interest rate last summer to combat inflation and must look to hike rates as soon as possible, said Henderson's Simon Ward.

The pound's weakness threatens to bolster inflation above 5%, supporting the need for higher interest rates, says MPC hawk Andrew Sentance.

Sterling has strengthened against the dollar as a report revealed UK consumer confidence increased in March from record lows, boosting the Bank of England's case for an interest rate hike.

Consumer Prices Index (CPI) annual inflation fell by a surprise 0.4% to 4% in March as the cost of food and drink lowered, but it is still double the Bank of England's target.