(MENAFN– ecpulse) This week, Bank of England (BOE) will announce its first monetary decision this year after the British economy has made a remarkable improvement in 2013.
The BOE will probably hold its monetary stance in January by keeping interest rate at 0.50 percent and amount of asset purchases at 375 billion pounds.
The British economy has gained strength since August, as it expanded 0.8 percent in the third quarter, where the BoE predicts growth of 2.8 percent this year.
“Recovery has been stronger than previously thought and that the government`s long-term economic plan is working,” the Office for National Statistics (ONS) said in December.
"But risks remain and the job is not done, so the government will go on taking the difficult decisions needed to deliver a responsible recovery for all," the ONS warned.
The BOE has referred last month that the recovery pace is at risk from the sterling’s appreciation, as it hovered near a five-year high against other currencies.
"Any further substantial appreciation of sterling would pose additional risks to the balance of demand growth and to the recovery," the MPC said in minutes of its December 4-5 meeting.
Regarding inflation, the BOE said in the minutes that inflation could reach the bank’s target of 2 percent for the first at early 2014.
Therefore, there are concern meanwhile for the BOE and therefore it is likely to keep committed to its forward guidance that links any change in interest rate linked to an unemployment threshold of 7 percent.
Jobless rate fell to 7.4 percent in the quarter through October, recording its lowest level since 2009.
Data released last week showed that the manufacturing sector eased growth to 57.3 last month from November`s three-year high of 58.1.
This week, however, the services sector is estimated to widen expansion to 60.5 from a previous of 60.0.
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