The Bank of England will probably leave interest rates unchanged for a second month following its meeting today, according to economists. The central bank last cut rates in February, a surprise move that saw borrowing costs fall 25 basis points to a 48-year low of 3.75pc. It was its first interest rate move in 15 months. "Today we are due a Bank of England interest rate announcement at 12.00, where I expect no change," said Niall Dunne, economist at Ulster Bank. "Inflation is too far above target and the pound too weak - which points to inflationary pressure ahead - to risk a rate cut now." Policymakers are also unlikely to cut in the immediate aftermath of Gordon Brown's budget yesterday, according to Geraldine Concagh at AIB Treasury, as they will want time to sift through the economic implications of the budget.
The European Central Bank (ECB) last week left its borrowing costs unchanged, adopting a wait and see approach amid the war in Iraq; it lowered rates on two occasions in the previous five months. Both the Bank of England and the ECB are expected to cut interest rates again this year, with many analysts pencilling in May for the next round of rate reductions. //www.fxcentre.com