Rate rise unlikely

Leading economists said today that a rise in interest rates in the near future was unlikely after the Bank of England revised its growth forecasts.

The Bank said today that it expects the economy to grow by 2.6 per cent instead of 2.7 per cent, after the slowdown in consumer spending was “more marked” than it had anticipated.

Publishing its inflation report, Bank of England Governor Mervyn King told a press conference in London: “Weakness in household spending has become more marked and has persisted into this year.”

Inflation is expected to move above the two per cent target this year, after hitting 1.9 per cent in March, before settling near target at the beginning of 2006, he said.