-Vicky Redwood, an economist at Capital Economics Ltd.
The Old Lady of Threadneedle Street, also known as the Bank of England, left its monetary policy unchanged at the April meeting to see whether a decline in inflation is temporary or exacerbates and turns into a threat for the UK economy. In the last interest rate decision before the general election on May 7, the central bank maintained its benchmark borrowing rate at 0.5%. More details on vote composition among the nine-member Monetary Policy Committee will be revealed in the meeting minutes due out on April 22. The BoE remains in wait-and-see mode as new outlook looms. Officials will report on their forecasts for inflation, economic growth, and the labour market on May 13 as part of the quarterly Inflation Report.
The British economy enjoyed the quickest growth among major advanced economies last year and is predicted to expand by 3% this year, despite a weaker beginning to 2015. Pay growth is starting to pick up, while cost of living dropped sharply on the back of the plunge in global crude prices. Inflation touched zero in February, alleviating pressure on the BoE to start normalizing its very low borrowing costs. All the central bank's rate-setters voted unanimously to maintain rates on hold since the beginning of the year due to decreasing inflationary pressures.
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