Services performance halts talk of interest rate rise

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Analysts and investors had been very confident the Bank of England would raise the rate to 0.75% on 10th May. Not so now. The Bank of England is almost guaranteed to leave interest rates unchanged at 0.5%, analysts say, after news of poor service sector activity in April ended any remaining justification for a rise. Economists had expected a rebound in April after activity was curbed by March’s bad weather. The disappointing services data will add to expectations that the MPC [Monetary Policy Committee] will take its finger firmly off the rate hike trigger – for now. Any further slowing will also raise questions as to whether the November rate hike may have been ill-timed.