There is almost zero chance of a cut in interest rates next month, a senior economist has said.Michael Saunders, an adviser at Oxford Economics and a former member of the Bank of England's Monetary Policy Committee , said Wednesday's higher than expected inflation figures made it very unlikely.The rate of price rises dropped to 2.3% in April - but economists had been predicting 2.1%.The general election, called for 4 July, also makes an interest rate cut unlikely, Mr Saunders said.
'They themselves wouldn't want to be a cause of volatility,' he told Bloomberg.'The MPC would be especially reluctant to do a surprise rate change during an election campaign. 'But, in practice, a June rate cut is already ruled out by inflation figures.'The first rate cut is likely to come in August, Mr Saunders said.He added: 'I do think over the course of the year, markets may now be slightly under-pricing the extent to which interest rates come down.
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