The Bank of England is likely to signal growing confidence that UK inflation is heading in the right direction, despite recent setbacks in the US, as policymakers weigh the case for an immediate interest rate cut this week.
The Monetary Policy Committee is expected by investors to keep the key rate of interest unchanged at 5.25 per cent when it meets on Thursday. But recent statements suggest two or more officials are already prepared to vote for a downward move.
Dave Ramsden, a BoE deputy governor, last month raised the prospect of a lower inflation forecast when the central bank sets out its latest projections. Some economists read his speech as a sign he feels confident enough to advocate rate cuts.