Pain later

摘要

When the Bank of England raised in-terest rates to 4.75% in August, the City was expecting them to reach 5.0% this month. Instead the Bank's monetary-policy committee left them unchanged when it met on November 4th. Judging by its quarterly Inflation Report, they'll stay that way for the next few months. One reason is that the economy has already slowed markedly in the third quarter, This is likely to prove a temporary "soft patch", but the Bank has also become gloomier about the growth outlook in 2005. In August, it projected a rapid expansion in the first half of next year, but it is now predicting quite a pronounced slowdown to around 2.5% (see chart).