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BoE expected to hold interest rates

The Bank of England is expected to hold interest rates at 0.5% and keep quantitative easing at £375 billion, despite last week’s poor economic figures.

It is anticipated that The UK manufacturing industry will also shrink for the third consecutive month in July following weak demand in the UK and abroad.

Economists predict that the manufacturing PMI will fall to 48.4 in July from 48.6 in June. Any figure below 50 signals contractions.

The Markit/CIPS construction survey is also expected to show a decline, resulting in an increase in the number of construction insolvencies by the end of the year. This is down to Government spending cuts, the end of the Olympics and bad weather.

Last week figures indicated that the UK economy remains in recession, after the economy shrank by 0.7%.

Many now believe that business confidence is falling due to the weak economy, dissuading many from making necessary investments.

Capital investments are set to grow by just 1% over the next year.

Data published by the Bank of England today (Monday) is expected to show a fall in mortgage lending and approvals in June. Alongside the likelihood that Nationwide statistics will show that house prices fell by 0.2% in July, this will mean that house prices are around 2% lower than the same period in 2011.

This was posted in Bdaily's Members' News section by Ruth Mitchell .