BOE 2018 rate hike still isn't a given - ING

James Smith, Developed Markets Economist at ING, explains the factors that may make it difficult for the Bank of England to announce a 25 basis point rate hike

Key points

Core inflation to slip back in coming months - 18 months on from the Brexit vote and prices have more or less adjusted to the new level of the pound - or put another way, the rate of pass-through from the weaker currency has begun to slow.

With the economy still struggling to get up to speed and raw material costs rising, some firms may continue to take a more conservative approach to wage-setting with an eye on maintaining margins. It's this latter reason that leads us to think wage growth may not pick-up quite to the extent the Bank has been penciling in.

A lot still depends on Brexit, but whatever is decided, the Bank has a fairly narrow window before the summer if it wants to squeeze in a rate rise.