THE Bank of England is expected to leave interest rates unchanged this week after inflation dipped last month and economic growth continues to stutter.

Economists believe the Bank’s Monetary Policy Committee (MPC) will keep rates at 0.25 per cent on Thursday, despite three out of eight policymakers calling for an increase last month and amid conflicting public pronouncements in recent weeks. Before June’s inflation reading of 2.6 per cent, there had been growing clamour for a rate rise amid a Brexit-fuelled increase in the cost of living.

While remaining above the Bank’s two per cent inflation target, it represented an easing from the previous month’s 2.9 per cent. However, latest GDP figures showed growth was limited to 0.3 per cent in the second quarter. Howard Archer, chief economic adviser to the EY ITEM Club, said: “The odds now very strongly favour the Bank of England keeping interest rates at 0.25 per cent. There have also been signs of growing division among rate setters, with Ian McCafferty, Kristin Forbes and Michael Saunders voting for a rise in June and the Bank’s chief economist Andy Haldane suggesting he may support a “prudent” increase this year. It is unclear how many policymakers will vote for a rise. Forbes stepped down at the end of last month and her replacement, Silvana Tenreyro, is an unknown quantity.

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Economists also expect the Bank to downgrade growth forecasts when it releases its quarterly inflation report following a slump in consumer confidence and a string of weak economic data.