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To: maceng2 who wrote (498)	11/2/2003 3:46:23 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Bank of England seen leading way in global interest rate hikes channelnewsasia.com LONDON : The Bank of England is expected to become the world's first major central bank to raise interest rates during the current cycle this week as a global economic recovery gathers pace, but analysts say others may be in no hurry to follow suit. Just one month ago few analysts were predicting that the first rate rise by the British central bank since February 2000 would come as early as November.Advertisement But records published earlier this month showing that almost half of British monetary policymakers wanted a rate hike at their October 9 meeting sent economists scurrying for their erasers. Now all but one of 26 economists polled by AFP's financial newswire AFX expect the Bank of England's monetary policy committee (MPC) to increase the main official lending rate by 25 basis points on Thursday from a 48-year low of 3.5 percent. "A continuation of very strong personal borrowing, another buoyant house price increase in October and a very punchy set of retail sales figures suggest that it's odds on that the MPC will hike rates next week," said Philip Shaw, economist at Investec Securities. Expectations of a rate hike had already been kindled by a sharp upward revision to official figures last month showing that the British economy grew twice as fast as previously thought in the first half of the year. And the British economy remained on the road to recovery in the third quarter, when growth held steady at 0.6 percent on a quarterly basis, official figures have since shown. Whether this expected rate increase by the Bank of England proves to be the start of many "depends on the sustainability of the global recovery and whether the consumers appetite for debt cools," said HSBC economist John Butler. "We expect rates to rise to 4.0 percent by February and remain there for the rest of 2004." A rate hike in Britain next week would be the first by a major central bank since the start of a concerted monetary policy easing around the globe in 2000 to try to breathe life back into the flagging world economies. But central banks in other major economies could be slow to follow suit, say experts. The US Federal Reserve last Tuesday vowed to hold interest rates at a 45-year low of 1.0 percent for a "considerable period". Although US government figures showed Friday the world's biggest economy grew at a blistering annual pace of 7.2 percent in the third quarter, the Fed is still expected to hold fire for a few more months at least. The European Central Bank is tipped to peg its main interest rate at 2.0 percent on Thursday, and for some months to come. Some economists say a rate cut looks more likely than a hike at the moment in the sluggish euro zone. - AFP