Following last month's rate cut where the banks did not all follow suit, is expected that the Bank of England will not cut rates this week. This is because Sterling is falling on the currency markets:
'Sterling represents one of the inflation risks,' said George Buckley, chief UK economist at Deutsche Bank.
'We have seen a long period of lower prices thanks to cheap imports and a strong pound. That is now coming to an end.'
As Sterling weakens, the pound buys less an dputs the price of imported goods up, increasing inflation. But some economists do predict a rate cut, saying that it will come soon, so why not sooner than later?
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